Rule Change injured Legal Advice Bureau
A change in the rules governing firms handling personal injury claims contributed to the collapse of a Manchester business resulting in the loss of 50 jobs – The Legal Advice Bureau (LAB) has gone into administration after the Ministry of Justice decided that claims firms would no longer be allowed to generate business by cold-calling potential clients – LAB made money after generating leads for law firms who would then pursue personal injury claims.
Dean Watson, administrator of accountancy firm Begbies Traynor, commented that the ministry’s ruling removed a large proportion of the firm’s income at the same time it was being pursued by HM Revenue & Customs for unpaid tax.
Mr. Watson continued by stating that LAB’s business was totally affected by this decision which forced them into making redundancies whilst still coming under pressure from HMRC, therefore the directors sought insolvency advice, as the company would have been wound up otherwise.
Source;
Thebusinessdesk.com/ News (Rule change hit claims firm-05.10.09)