Losses at the Co-op's legal subsidiary increased by 70% in the first half of this year, the parent Co-operative Group announced today. Co-operative Legal Services (CLS) lost £5.1m in the 26 weeks ending 5 July, compared with £3m over the same period last year. Sales for the first half of 2014 were down by 28% from £18m to £13m.

In a statement, the subsidiary said results were 'in line' with expectations and reflected the cost of restructuring the business.

Managing director Matt Howells said: '[The results] reflect the fact that CLS entered into 2014 with substantial monthly trading losses. Present management took action to address the underlying issues and restructure the business to align operational capacity with sales volumes.'

Today's financial statement said CLS remains a 'fledgling business' that is 'moving towards the right size and shape for the future'.

The business cut around 60 staff members from its personal injury department in 2013 and ended the year with losses of £9.1m. In its 2013 financial results, CLS said it expected to be profitable in 2015.

Howells said there remains a 'significant opportunity' to build a legal brand and the business has seen an increase in demand for family legal services and probate services. He added that this trend is likely to continue in the second half of this year, with closer working ties established with the Co-op's insurance and funeralcare subsidiaries..

'We believe there is a space in the market for the Co-operative Legal Services to become one of the go-to legal brands in our key markets and to grow by providing customers with transparent prices and continually high standards of service,' said Howells.

This year has seen significant changes to the management of the board, with four directors leaving since March.

CLS is an alternative business structure licensed with the SRA. It was the first major non-legal brand to secure a licence, in March 2012.

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