More Than 1,000 Personal Injury Firms Have Gone Bust

The effects of the Jackson Reforms and changes to the personal injury market have been felt in the legal sector with more than 1,000 small to medium legal companies less in the third quarter of 2013 than during the same period of 2012. There were 7,295 SME legal firms remaining at the end of September, not only signifying a 12% loss but meaning that nearly 200 firms went bust during the quarter.

The aim of the reforms and changes was to reduce £220m from the annual legal aid bill. Legal Aid reforms mean that funding has been withdrawn for many people that would have previously been given access. Family law and civil litigation cases were among the areas hardest hit by the changes. Funding will no longer be available for certain cases, while certain groups of people including immigrants will not be given access to any of the legal aid budget available in the UK.

Many groups have protested against the changes, with judges and the legal industry claiming that it will not only lead to poor representation but it will transfer costs rather than save them. They argue that an increase in the number of litigants in person, people that represent themselves rather than use professional legal representation, will mean that cases will take longer and cost more in that respect.

The latest figures show that these changes, among other factors, mean that even more smaller firms are in financial distress as well. The number that are considered to be in financial distress has risen 26% to 2,314 while the Solicitors Regulation Authority has said that 495 firms have been identified as being in financial risk and 55 firms are at high risk.

The number of firms in financial risk would indicate that the number of firms going bust is only likely to increase in the near future, rather than decrease. The Jackson Reforms and cuts to the Legal Aid system mean that solicitor and legal firms are finding it more difficult to turn a profit. The full effect of this has been felt over the past 12 months.

About The Author

Safina Soni is a principal personal injury solicitor at Stocks Legal Manchester, specialising in fatal injuries, criminal injury claims and accident at work claims.

Safina has brought a wealth of experience to Stocks Legal and is a pivotal member of their executive team.

"I am very proud to be a personal injury solicitor as I know that I make a real difference to people who have suffered and continue to have problems as a result of their injuries."

As a market leader in personal injury claims, Safina is really easy to contact. You can call her for FREE on 0800 988 9055 or you can send her a confidential email by clicking here.

General PI NewsOct 24th, 20130 comments