Four costs firms and two solicitors’ practices have taken on the 1,000 files that Just Costs was dealing with before it went into administration last week for effectively the second, and now final, time.
In a statement, the joint administrators, Julien Irving and Andrew Poxon of Leonard Curtis, said: “The company had experienced difficulties as a result of the regulatory and financial pressures currently being placed on the sector. The company has also suffered from cash flow issues.
“Regretfully, the administrators have made 26 employees redundant.” The CLSB website still names four Costs Lawyers as working at the firm.
Prior to the administrators’ appointment, all client matters were transferred to costs firms Burcher Jennings, Civil & Commercial Costs Lawyers, KWLC Legal Costs and Partners in Costs Limited, as well as Clear Law Solicitors and Simpson Sissons & Brooke. None of KWLC or the solicitors’ firms are listed as employing Costs Lawyers.
We understand that Recovery First – a business that specialises in transferring work in progress in the personal injury sector – handled the caseload.
Mr Irving added: “While the number of redundancies was unavoidable, we are pleased to say that we have ensured that approximately 1,000 client matters were seamlessly transferred to regulated practices and therefore avoided SRA intervention.”
Just Costs was set up in 2006 and, when it became an alternative business structure in 2013, it had nearly 100 staff and a turnover of more than £5m.
In November 2016, it began operating under a company voluntary arrangement, under which it sought to repay creditors nearly £800,000 over 24 months.
A year later, after it failed to keep up with the schedule – 28% of what was owed was paid – the firm was sold out of administration to a new practice set up by founder Paul Shenton and fellow solicitors Jodi Booth and Adam Quinn that traded as Just Costs Solicitors (JCS).
While saving 45 jobs at the time, NatWest Bank, as the secured creditor, was left £506,000 out of pocket, with unsecured creditors owed £1.75m.
JCS paid £20,000 up-front plus monthly payments of 5.1% of the previous month’s realisations.
The administrators’ most recent progress report – for the six months to 26 October 2018 – said that, after making payments totalling £25,000 in May and June, JCS asked for a “payment holiday” that led to no payment in July and just £2,000 per month thereafter.
NatWest received its first dividend of £40,000 in October, while there is likely to be just £21,000 distributed between the unsecured creditors.
Further, both Ms Booth and Mr Quinn resigned as directors of JCS last month.
Leonard Curtis has had a notice on its website in recent weeks “urgently seeking interested parties with regards to the sale of the business and assets of a solicitor’s practice which specialises in costs”.
It reported that the firm had 33 staff, 1,100 live cases in respect of 210 clients, work in progress value of £850,000 and a debtor book of around £500,000. The closing date for expressions of interest was 11 January.