ABS Minster Law posted a £599,000 loss in 2012/13 after being swallowed up by price comparison site comparethemarket.com owner BGL in May 2013.
According to accounts filed with Companies House the figure compares to a £3.1m profit generated by the volume personal injury (PI) firm the previous year.
The firm blamed the loss of the implementation of the Jackson reforms, which were introduced in April and restrict the amount recoverable by winning litigants in PI claims. The firm withheld a dividend payment to its directors as a result of the loss.
Last year a dividend of £1.3m was paid to Minster Law and shareholder funds closed £2m higher than they opened in 2011, going from £10m to £12m but dropping this year to £11.4m.
The firm said: “The business has experienced significant changes over the past 14 months. The personal injury market continues to be highly competitive and the company has made further investment during the period in people and technology to differentiate its service offering.”
Minster invested in a new 30-strong office in London at the end of 2013, backed by BGL, and managed to keep its turnover almost flat, taking home £102m in 2012/13 compared to £104m in 2011/12.
The firm’s work-in-progress (WIP) levels are traditionally high, thanks to its high-volume caseload. The 2012/13 accounts show WIP of £5m, compared to £4.7m the previous year, in conditional fees only recoverable if its claims are won.
It also had £72.3m connected to work with major insurance companies currently held as security for inter-company loans.
The firm said that due to the nature of the contracts “there is significant certainty around the successful settlement and recoverability of these amounts.”
The highest-paid director was paid £183,000 last year compared to £221,000 in 2011/12 and directors’ emoluments amounted to a reduced figure of £330,000, down from £436,000 the previous year.
BGL made a profit of £69.7m in 2012/13 and turned over £448.2m, compared to £418.2m the previous year.
The intermediary, best known for its meerkat-based ad campaigns, bought York-based Minster after the firm was granted approval by the SRA to become an ASS (31 May 2013). Adrian Christmas became non-executive chairman of Minster Law following the BGL buy-out.
The two businsses had been working together for the past seven years with Minster managing the claims process for the group’s motor and bike insurance companies.
Minster boosted its turnover by 27 per cent to break the £100m barrier for the first time in 2011/12.