Monday 18 March 2013 by Jonathan Rayner and Paul Rogerson
The managing partner of failed Midlands firm Blakemores accused the Solicitors Regulation Authority of intervening in the firm at the worst possible time last Monday, when the firm was shut down and over 200 solicitors and employees dismissed.
But the regulator rebutted Guy Barnett's claim, and his prediction that the intervention will cost the profession '£2m-3m'.
Barnett said that sum was his estimate of the cost of removing 7,500 live files from the firm's offices, taking them to a storage facility, entering them on a database, writing to each client and finding them a new solicitor.
The firm's 1,500 personal injury claimants will be particularly disadvantaged by the intervention, Barnett claimed.
'The SRA couldn't have found a worse time to intervene. These clients have until 1 April to find a conditional fee agreement, after-the-event insurance cover and a new solicitor before the next round of legal aid changes comes into effect.'
However SRA director of post-enforcement Helen Herniman said: 'Imminent critical events at Blakemores made intervention inevitable to protect clients' interests.
'[North-west firm] Stephensons, our agents, is aware of the fast-approaching 1 April deadline for legal aid changes and is contacting clients urgently through letters, emails and telephone calls.'
As the Gazette went to press, outsourcer Capita was issuing details of the intervention to the 1,400 remaining Blakemores PI files. Capita has drawn attention to the 1 April date and to the fact that local solicitors may be able to help.
Herniman added: 'We disagree with Guy Barnett's figure of £2m-3m for the cost of the intervention. Some £800,000-£1m is the more realistic estimate, which we can update once we have a clearer picture of what files the firm was holding.
'We commend the partners and fee-earners who stayed on after the intervention to help identify urgent and critical files, minimising detriment to clients. The Legal Services Commission also attended the intervention's early stages for the same reason.'
The LSC's involvement reflects Barnett's complaint that hundreds of asylum cases under legal aid certificates would also be left without representation. Barnett said: 'Who is going to reach all these clients? And what will they do when they arrive at court and find their solicitor is not there?'
However, the Gazette understands that Blakemores' immigration team stayed on for two days to help prioritise urgent hearings and the swift transfer of these files to other firms.
Barnett insisted that there was never any question of 'impropriety' in the manner of Blakemores' downfall, adding: 'Practising certificates have not been suspended. The intervention arose from the cumulative effect of the recession, such as the unhelpful attitude of the banks and legal aid changes, all combining to break the camel's back.'