Group Managing Director Andrew Grech, from law firm Slater & Gordon.
LAW firm Slater and Gordon are looking at closing two of its UK offices after a review following the $750 million share plunge two months ago.
The value of the personal injury specialist legal firm took a significant hit late last year after the UK Government announced in its November budget statement an end to the “compensation culture” by moving to remove minor soft-tissue injury claims and slashing legal costs by moving personal injury cases under a certain amount to the small claims court.
Its shares dropped again on the Australian Stock Exchange this week after the firm said it would not update the market in January on gross operating cash flow.
Yesterday, Slate and Gordon in the UK announced it was now assessing the feasibility of two of its firms in the UK with 51 jobs at risk.
“As part of a review of our property portfolio Slater and Gordon has begun assessing the feasibility of closing two of our offices, Failsworth and Derby,” a spokesman told British media.
“During this process we will work closely with all staff who will be impacted if a decision is made not to renew our lease on the site. All staff affected have been made aware there is the possibility of redundancy.”
The upheaval follows confirmation in the UK of three separate financial body probes including the Serious fraud Squad and Financial Services Authority, into the professional services arm of British firm Quindell which Slaters purchased last year for $1.2 billion that analysts in London claimed was well above market value.
Slaters have been looking to expand operations since entering the UK market in 2012 and buying up local competitor Russell Jones and Walker. That move followed changes to UK’s Legal Services Act that allowed nonlegal entities to own law firms.
The personal injury small claims industry has been a lucrative market in the UK with more than 1500 claims a day being made and bogus or not, insurers admitting paying out since it was cheaper than to challenge in court. In 2012 British Prime Minister David Cameron warned changes were coming to end the compensation culture, a warning the legal industry flagged again just months before the Autumn budget statement in November which Slaters would later say took the market by surprise.
There has been evidence of staged collisions in the UK where everyone in the car claims whiplash from the soft bumping into friends’ cars or unsuspecting random motorists.
Slaters employs some 3800 staff in the UK.
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