The Asons collapse – what happens now?
On Friday 24th March it was announced that Asons Solicitors had ceased trading. The announcement came the very week that DWF had threatened to wind the company up. It later transpired that Asons Solicitors had entered into a Creditors Voluntary Liquidation.
Whilst in its infancy, the liquidation of the company thus far has seen creditors claim that they are owed over £20m. Asons had a prominent presence in the personal injury market and insurers primary exposure is in RTA and NIHL.
DWF represent a number of insurers who have claims against the failed practice. After protecting our client's interests by registering them as creditors, DWF have managed to secure a place on the Creditors Committee.
James Stevens looks at the key points for insurers that arise out of the collapse of Asons, both in respect of the insolvency process and the handling of files where Asons were acting.
Ahead of Asons ceasing to trade, the practice was sold to Coops Law, with Asons claiming that 90 or so of their employees had transferred to Coops under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Asons was previously headed up by Director Kamran Akram ( solicitor) with his brother non-solicitor Imran Akram as CEO.
Coops Law is an ABS formed in 2016, originally under the title of Barclays ABS. Coops Law is to be directed by Hasib Khan as Head of Legal Practice with non-Solicitor Irfan Akram, as Head of Finance and Administration. Irfan Akram is also the brother of the former Asons Director Kamran and CEO Imran Munir Majid, previously Asons Head of Industrial Disease, has also been appointed a director of Coops.
Upon the collapse of the business the SRA announced that their Adjudication Panel were satisfied that it was necessary to intervene in the practice "to protect the interests of clients and former clients of Kamran Akram". The SRA stated that the former Chief Executive had "breached the SRA Principles 2011 and the SRA Code of Conduct 2011 (Paragraph 1(1)(c) of Schedule 1 to the Solicitors Act 1974 (as amended)). Paragraph 1(1)(c) relates to a failure to comply with the rules that govern solicitors' practices.
The SRA appointed Stephensons Solicitors to represent all Asons clients that were unrepresented as a result of the sale. The sale of the business does not mean that all of Asons' clients will automatically be represented by Coops as it remains the Claimant's prerogative as to who they wish to instruct to progress their claim. Kamran Akram has confirmed that Asons were a paper light business and he believes their servers have been transferred to Coops Law. There is no clarity at this stage as to how many Claimants are still unrepresented, how many Claimants have instructed Coops Law and how many Claimants have instructed an alternative Solicitor. In addition to the intervention by the SRA, it has emerged that Asons was wound up when it went into Creditors Voluntary Liquidation on 24 March 2017. Gareth Howarth of Path Business Recovery and Julian Pitts of Begbies Traynor have been appointed as Joint Liquidators.
Whilst the liquidation process is in its infancy, creditors thus far claim that Asons may have owed in excess of £20million. However this amount is disputed by the Director, Kamran Akram.
DWF's response to the liquidation process
DWF have been appointed as one of five creditor representatives on the Creditors Committee. As the only representatives of the Insurer Market on the Committee, we are advising clients and the insurance industry as a whole in respect of any creditor claims against Asons. DWF is an all service law firm, and immediately following the news of the sale – DWF were quick to mobilise a multi-disciplinary team to include insolvency specialists, and forensic accountants from our Business Restructuring Team. The team attended both of the creditor meetings which have taken place to date in order to protect our client's interests.
In the event that an insurer has any potential claims against Asons please contact DWF urgently for advice.
What happens now?
In addition to negotiating the insolvency process, there are a number of legal and strategic considerations for insurers that have cases outstanding where Asons were acting, or any law firm subsequently appointed to act in their place. DWF have therefore established a group consisting of specialist lawyers and representatives from the insurance industry, to consider what steps insurers should take within the insolvency process, as potential creditors and due to their exposure to outstanding RTA, EL, PL and disease claims dealt with by Asons, to ensure that they do not compromise their position.
DWF held its first Industry meeting on the 19th April which was also attended by RSA, Covea, Catalyst, Mulsanne, Admiral, Amlin and Eldon.
DWF invite you to provide us with details of your exposure so we may assist you in devising a bespoke approach. We will also be inviting all stakeholders to a further meeting hosted by DWF on 1 June. At that meeting DWF will provide further advice to all stakeholders to ensure that a consistent strategy is deployed by all and that your position and rights are protected.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.