1 Legal LLP (OC304926): administration
- Status
- In administration
- Administration began
- 2012-10-03
- Administrators
- David Thornhill, Russell Stewart Cash
- Administrators' firm
- FRP Advisory
- Incorporated
- 2003-06-24
- Location
- Manchester
Why it went into administration
- Management failings / irregularities
- Cash flow / liquidity pressure
- Competition / price pressure
From the administrators' statement
1 Legal was established in 2003 with the intention to focus on persona! injury legal work from rented premises at Corporation House, Corporation Road, Loughor, Swansea. Shortly after incorporation there was an opportunity to become involved in the British Coal COPD compensation scheme and within a period of 6 months the firm had received instructions from over 4,500 clients. This work proved to be very profitable with costs being awarded via a fixed costs tariff
The firm continued to grow but in 2007 the then Department of Trade and Industry (“DTI”) won a review of the fixed costs tariff which allowed them to reclaim £640,000 from the firm in costs and interest on previously settled cases. The firm reached an agreement with the DTI to discharge the hability by offsetting the amount due from future costs awarded. As a result this had a significant impact on the cash flow of the firm.
From 2008 the firm entered into the emerging financial clams market and grew the team to cover all aspects of financial irregularity claims for consumers. Where cases were successful the costs recovery was very good however it became clear to the firm that cases would need to be litigated to unlock work in progress on a number of cases. It became very difficult for the firm to secure funding to cover the disbursements and ongoing costs and as a result it became apparent that ongoing trading would not be possible.
Administrators' statement of proposals (2010-12-02) · Companies House register