The acquisition by comparethemarket.com owners BGL Group of leading personal injury (PI) firm Minster Law last week should be seen as a sign that the PI market is far from in tatters, according to Minster Law’s chairman, Adrian Christmas.
Minster Law is one of the UK’s largest road traffic accident (RTA) personal injury practices, employing over 800 people and handling more than 40,000 personal injury claims in the last financial year, making it the largest outright sale of a UK firm to date.
Minster’s turnover for 2011-12 was £107m and according to Christmas, the scale of this acquisition should be seen as a vote of confidence in the PI market. ‘From a strategic perspective the deal reinforces my belief that the PI market is not in tatters,’ he said.
The firm has been working with BGL for the past seven years, in particular managing the claims process for the group’s motor insurance customers. BGL, which has become known for its successful comparethemarket/meerkat adverts, also has multiple insurance divisions including motor, home and commercial vehicle insurance group Frontline, motorcycle insurance group Bennetts and life insurance group Beagle Street.
The deal finally became possible last Thursday (30 May), when Minster Law was given approval by the Solicitors Regulation Authority (SRA) to convert to an alternative business structure (ABS). The firm was one of the first to apply in January last year but because of the complexity of BGL’s corporate structure, the process has taken a year and a half.
The move comes as the PI market is shaken up by new entrants, including Admiral, Ageas and RAC, which were granted ABS licences to provide legal services in April. Ageas tied up with Cardiff-based NewLaw Solicitors; Admiral entered two separate joint ventures with Lyons Davidson and Cordner Lewis; and RAC agreed a five-year deal with Quindell Portfolio.
From a law firm perspective, these types of deals respond to Lord Justice Jackson’s civil litigation reforms, which came into effect on 1 April this year and included the banning of personal injury referral fees. Claims management companies that used to receive referral fees for providing firms with access to claimants in personal injury cases can no longer operate in their current form, mean PI law firms are seeking new channels to access the consumer.
According to Christmas, who will become a non-executive director of the firm, players in the current market will need ‘deep pockets and to take the long term view’.
He added: ‘BGL has a lot of B2C work and will be able to open up a market which is currently not easy for Minster to access.’
Minster is expected to carry on operating under its own recognised brand as another branch of BGL.
Peter Winslow, chief executive of the BGL Group, said: ‘Like BGL, Minster Law has experienced strong growth in recent years and I’m looking forward to the company becoming part of the BGL Group and our future growth strategy’. Between 2011-2012 BGL’s pre-tax profits also grew by 22% to £88m.