Norwich insurance firm in £7.67m High Court legal row over referrals
PUBLISHED: 06:00 15 December 2012 | UPDATED: 11:08 15 December 2012
A Norwich-based insurance company is at the centre of a £7.67m legal row with two personal injury law firms following a wrangle over a referrals contract.
Motorplus, part of ULR Additions, has been landed with a multi-million pound claim from MTA Corporate Solicitors and its sister company MTA Solicitors alleging that it had left invoices unpaid and failed to refer enough work to meet the targets in its contract with the two firms.
The claim was issued at the High Court on October 26 – just weeks after ULR unveiled its exceptional performance in posting a £2.7m pre-tax profit for 2011.
Ironically, next April will see the government ban the system of referral fees, where claims management firms pay lawyers for dealing with claims, in a bid to clamp down on the UK’s “compensation culture”.
Rob Kay, chief executive of ULR Additions, refused to comment on the case but said the company, was keen to find an amicable resolution to the claim.
He also pointed out that the company, which employs 150 staff, had nearly doubled its turnover to £30.8m from £15.9m.
“It is frustrating that we are not able to comment on this case in any detail but we are disappointed by this development and are hopeful that we can still bring the matter to an amicable resolution,” Mr Kay said.
“ULR Additions has performed exceptionally well in the last two years in challenging trading conditions. We restructured the business in 2011, doubled turnover to over £30m and increased sales of our core products by 90pc. Our 2012 figures will underpin our 2011 performance and looking ahead we´ve plans to increase our product range still further and to continue offering an unrivalled service to our broker partners.”
The legal expenses and insurance add-ons specialist, based at Kircam House on Whiffler Road, was issued with a £7.36m bill from MTA Solicitors amid allegations that it had missed its personal injury claim referral target by 5,299, and failed to refer enough family legal protection work to meet its contract agreement.
Meanwhile, MTA Corporate Solicitors is also seeking £294,847 alleging that invoices had not been paid and it had missed its referrals for non-personal injury family legal protection work by 570.
David Green, managing partner in MTA Solicitors based in London, Bromley and Manchester, claimed they had been doing work with ULR for two to three years, but it was at the end of 2011 when they started seeing difficulties.
Mr Green, whose firm employs 400 staff across the country and has a turnover of £20m, said: “When you are expecting someone to deliver on the contract and the work is not being recovered, it is not a devastating consequence, but it is not a good one.
“The business has gone and we will try to replace that work elsewhere. But we are just unhappy with the way this contract has ended.
He added: “We still have several hundred staff and we are progressing.”