Woodwards Law - Case Update

A personal injury firm was reportedly pushed into administration after creditors started implementing a somewhat surprising strategy for collecting unrecovered fees.

Steven Wiseglass of Inquesta Corporate Recovery was appointed as administrator of Wigan-based personal injury firm Woodwards Law on 19 December.

In his proposals, the administrator reveals the company’s explanation for the events leading up to the insolvency. According to the board of directors, due to the uncertainty surrounding road traffic accident claims, the firm started to deal with and make investments in other types of claims such as holiday sickness claims in 2015. However, most of the invested money was lost due to the significant change on the burden of proof of the legal cases.

In addition, according to the board, creditors like doctors and barristers started to pursue the firm for unrecovered fees, even though for many years they had just written off the fees on unsuccessful cases. An out-of-court settlement was reached with a doctor in the sum of £325,000, further increasing the financial burden on the firm. More claims were expected from the same creditor.

The report also states that the firm had secured additional financing from Natwest Bank and White Oak, but that the directors felt it was inappropriate to proceed given the prospect of not being able to pay back the loans.

The administrator’s proposals can be found HERE.