Client Alert: Asons Solicitors Ltd

Following the recent media reports and speculation in relation to Asons Solicitors, we wish to update clients on the position as we understand it, based upon our ongoing engagement with the SRA and other affected parties:

Asons Solicitors Ltd

During late March 2017, a number of actions were taken by Asons to restructure the business including:

• Amending the account period for the company from 31 May 2017 to 30 November 2016. This resulted in the last filed accounts (ending November 16) showing a trading profit as compared to the preceding period (ending May 16) that revealed a significant trading loss. The accounts also revealed significant liabilities, largely in relation to bank loans and borrowings.
• Restructuring the capital structure of the business so that there was only one allotted share, held by Kamran Akram, the sole Director of the company.

Asons Solicitors Ltd then purported to transfer its business to Banks Solicitors Ltd, trading as Coops Law, including the transfer of all claims files to Banks Solicitors Ltd. 

These steps pre-empted an intervention by the SRA, which took place on 30th March 2017 and extended to both Asons Solicitors Ltd and the practice of Kamran Akram and related to the following grounds:

Ground of intervention in relation to Kamran Akram

1. It is necessary to intervene to protect the interests of clients and former clients of Kamran Akram; and
2. Kamran Akram has breached the SRA Principles 2011 and the SRA Code of Conduct 2011.

Ground of intervention in relation to Asons Solicitors Limited

1. It is necessary to intervene to protect the interests of clients and former and potential clients of the firm; and 
2. Kamran Akram has failed to comply with the SRA Principles 2011 and the SRA Code of Conduct 2011 which are rules applicable to the firm and Mr Akram by virtue of section 9 of the Administration of Justice Act 1985.

The circumstances surrounding the above events are part of the ongoing SRA investigation. Kamran Akram’s Practicing Certificate has been suspended pending the outcome of the investigation.  Whilst we are in ongoing liaison with the SRA, we do not know the full scope of their investigation and are therefore unable to speculate on action that may be taken by the SRA once their investigation is complete.  In the meantime, a resolution was passed on 3rd April 2017 for the voluntary winding up of Asons Solicitors Ltd, and Gareth Howarth of Path Business Recovery Ltd has been appointed as the liquidator for the purpose of those voluntary winding up proceedings.

Stephensons Solicitors: SRA Invention Agent

In protecting the interest of all former Asons clients, the SRA appointed Mr N Bolland of Stephensons Solicitors as their intervention agent. The SRA indicate that ALL former Asons matters fall within the scope of the SRA intervention, and all matter files are therefore subject to the actions of the Intervention Agent.

Stephensons’ function as Intervention Agent is not to take over the conduct of all files but to protect the client interests whilst engaging with all clients individually to secure their consent for the transfer of instructions to an alternate legal provider. In performing that function, Stephensons will only take steps upon a claim if it is necessary to protect the interests of an individual client, and are otherwise tasked solely with ensuring an orderly transfer of files to new legal representatives.

We are aware that Stephensons are reviewing all of the former Asons files and engaging with the underlying client to ensure that the cases are transferred to new solicitors. This is an extensive exercise and will take a number of weeks, and Stephensons are therefore prioritising those with imminent court hearings. However, Stephensons must also respect the wishes of individual claimants and if they wish to authorise transfer of their file to an alternative solicitor then that is their prerogative.

Coops Law Ltd

As above, Asons purported to transfer its business to Banks Solicitors Ltd, trading as Coops Law.

Steps have also been taken to restructure this business, including:

1. On 24th March 2017, the registered office of Banks Solicitors Ltd was changed to 40 Churchgate, Bolton, BL1 1HL (the main Asons office).
2. On 28th March 2017 the company name was changed from Banks Solicitors Ltd to Coops Law Ltd.
3. On 29th March 2017, Mr Munir Majid was appointed as a Director of Coops Law Ltd, making three active Directors in total: Munir Majid, Irfan Akram and Hasib Khan.
4. On 31st March 2017, Mr Irfan Akram was confirmed with Companies House as a “person with significant control” in Coops Law Ltd, owning in excess of 75% of the issued share capital. There is in fact only one issued share, which is held by Mr Akram.

There has been liaison with the SRA to update the authorisation status of Coops Law Ltd in parallel to these changes, and the SRA has now confirmed that with effect from 30th March 2017, Coops Law Ltd is an authorised body regulated by the SRA. As such, it is now possible for Coops Law Ltd to legitimately take over former Asons matters BUT ONLY with the explicit and informed consent of the claimant to transfer their file of papers from Asons Solicitors Ltd to Coops Law Ltd.

We are therefore now starting to receive service of Notice of Change of Solicitors from Coops Law Ltd stating that they are instructed to take over conduct of the claim from Asons. We expect this to escalate as files are processed via Stephensons and as Coops Law Ltd secure formal authority for the transfer of papers.

We are, however, also aware of at least one matter where Coops Law have served Notice of Change, but the claimant himself had emailed our insurer client after the date of the Notice of Change and stating that following the collapse of Asons they considered themselves to be unrepresented and asking the insurer to take no steps to their detriment. This would suggest that the Notice of Change was not legitimately served and that Coops Law Ltd did not have valid authority for the transfer of that claimant’s papers.

We are addressing this issue with the SRA, who are investigating this matter further and confirm that their investigation includes focus on the transfer of files from Asons to Coops Law Ltd. Sadly, however, this episode does mean that we cannot simply accept at face value any Notice of Change – or other written confirmation from Coops that they are instructed in place of Asons - and should seek the further validation below.

What does this mean for insurers/claims handlers?

1. If you have received confirmation from ‘Banks Solicitors Ltd trading as Coops Law’ or Coops Law Ltd that pre-dates 30th March 2017 stating that they have taken over conduct of a claim on behalf of a former Asons client, then it is potentially invalid as:
   
   1. Banks Solicitors Ltd effectively no longer exists due to the name change;
   2. Coops Law Ltd only became an SRA authorised entity on 30th March.

   In reality, however, the claims will now be handled by Coops Law Ltd. Any deficiency in notice provided is likely to be deemed a technicality caused by the timing of notice versus the steps that were being taken in the background to restructure the business and secure updated SRA authorisation. However, you should request disclosure of a form of authority signed by the claimant that confirms their authority for the transfer of their file of papers from Asons to Coops Law Ltd.

2. On litigated cases in which Coops Law Ltd now purport to be acting, your panel providers should be seeking service of Notice of Change of Solicitors in the name of Coops Law Ltd. They should also be requesting service of a form of authority, signed by the claimant, that confirms the claimant’s explicit consent to the transfer of the file from Asons to Coops Law Ltd. We have also asked Coops Law to provide a form of ID from the claimant displaying their signature to enable validation of the form of authority, but Coops have refused such requests and we cannot enforce disclosure of the same.
   
   
3. On any case where you (or your panel provider) are served with notice from Coops Law Ltd that they are instructed to act in place of Asons, but either they refuse to serve a copy form or authority or you have doubts about the authenticity of that authority served then you should Email sraenquiries@stephensons.co.uk confirming it is a former Asons matter, providing the case details and requesting confirmation as to whether the file has been correctly transferred to Coops Law.
   
   
4. Any cases that are currently in the backlog for review by Stephensons, and on which Coops Law (or indeed any other firm of solicitors) have not yet secured client authority for the transfer of papers from Asons, will remain in abeyance until either Stephensons have reviewed the papers and facilitated a transfer to alternative solicitors, or an other firm secures consent to transfer. Current communications with Stephensons suggest that the majority of files will ultimately end up with Coops Law.
   
   
5. On any litigated claims falling into that backlog, your panel firms should be identifying all forthcoming key dates in the litigation, whether hearing dates or dates for compliance with key procedural actions.  Your panel firms should aim to comply with those key dates in order to protect your/your policyholder’s position, but should recognise that the courts are unlikely to view positively any attempt to take advantage of the current state of flux to the detriment of the affected claimants.  Where necessary, your panel firm should contact Stephensons via sranenquiries@stephensons.co.uk confirming the case details, seeking confirmation as to whether they retain the case, and whether they are able to deal with the relevant key dates or whether any extension / adjournment may be required.
   
   
6. The position regarding costs liabilities on matters resolved with Asons but currently unpaid remains unclear, and is complicated by the voluntary liquidation. We do not know whether the purported transfer from Asons to Banks / Coops included any payment for Asons’ WIP or an agreement to secure a lien for costs and whether such outstanding costs will now fall into the liquidation.  Stephensons have indicated on some matters where Coops are now seeking payment of damages and costs on such previously concluded matters that only damages should be paid.  We are seeking clarification from the SRA and the liquidator and will advise further as soon as we are able to do so.
   
   
7. Any costs liabilities in insurers’ favour against former Asons clients will also require consideration. If QOCS protection has been set aside and permission to enforce granted, then the claimant will remain liable for those costs and insurers will remain at liberty to seek recovery. The files will, however, remain with Stephensons and we await confirmation as to whether they will be able to place those files with alternative solicitors to advise the claimant on their costs liabilities, or whether it will be necessary to pursue the claimants as litigants in person. We are liaising with Stephensons and will advise affected insurers directly on a case to case basis.
   
   
8. Any outstanding costs liabilities held by insurers against Asons Solicitors Ltd following successful resolution of claims in which costs were ordered against the firm will now fall as unsecured creditors within the liquidation. The accounts to November 2016 reveal significant liabilities, including creditors in excess of £4million, largely through secured bank loans and overdrafts. Unfortunately we therefore consider the prospects of recovery of any such costs to be slim. We will advise clients on such cases on a case to case basis, as appropriate.  

We are continuing to liaise with the SRA and Stephensons, and are seeking to engage with the Liquidator and, as this remains a moving picture, we will provide further updates to clients as appropriate.