An internal dispute within specialist personal injury law firm Thompsons has led to its English and Welsh divisions splitting from its Scotland branch.

The disagreement has culminated in the London division giving the Scottish branch notice that from the end of the year it will no longer be entitled to work under the name of Thompsons.

It has also given notice of its intention to set up a new Thompsons office in Scotland.

The Scottish branch applied for an injunction but an out of court agreement was reached. The London office must now give 14 days notice if it intends to back down on the agreement.

The dispute centres on cost regimes. The recovery costs in Scotland are different from the recovery costs in England and Wales.

London senior partner Tom Jones says that because of the cost differences, Scottish partners get paid less for each case than those in other UK branches and claims that they want the autonomy to put together their own packages.

However, Edinburgh-based partner David Stevenson denies that the split is that broad. “We have problems with one client in particular,” he says.

Jones says that the firm’s trade union clients are unhappy with the disparity. “We want to offer our union clients a national legal package. They don’t want us to say that there is one deal north of the border and another deal south of the border.

“If we cannot agree with Scottish partners to work on a national basis then we will set up an office in Scotland that will offer a national service,” he says.

Stevenson says: “It is now a matter of dispute and litigation. It has given an undertaking that it will not be opening an office in Scotland. It has been indicated that it will give 14 days notice if it changes the undertaking and if that happens we will go straight back to court.”

Thompsons is the largest personal injury law firm in the UK. It acts primarily for trade union members but also does work for private and legal aid clients. It has offices in Birmingham, Bristol, Cardiff, Ilford, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Sheffield, Stoke-on-Trent, Teeside, Harrow, Belfast, Plymouth, Edinburgh and Glasgow.