The High Court has sided with Injury Lawyers 4U (IL4U) in a significant legal battle against three founding law firms, marking a pivotal moment in the ongoing dispute over financial contributions within the marketing collective.
In a recent ruling, His Honour Judge Cawson KC granted a reverse summary judgment in favour of IL4U and directors James Maxey and Daniel Slade. The judgment addressed claims by the founding firms—JMW Solicitors, Ralli, and Howe & Co—that an original agreement allowing for lower fees for founder members was still valid. However, the court found that a 2013 agreement superseded this arrangement, negating the differential pricing privilege initially granted to the founders.
IL4U was established in 2002 by the Manchester firm Amelans, led by Andrew Twambley, Martin Cockx, and Denise Wilkinson. The initiative aimed to take back personal injury lead generation from major market players. Early on, original members paid £10,000 for a slot in the scheme, which was allegedly promised to remain unchanged. However, when new panel members were introduced, they paid a higher fee of £15,000, reflecting the risk borne by the founders.
The court’s decision emphasises that the 2013 agreement clearly replaced previous contractual terms, rendering claims under the old terms ineffective. Judge Cawson dismissed the founding firms’ additional arguments that sought to reinstate the 2003 pricing arrangement through legal constructs such as estoppel and collateral warranty.
The dispute arose when IL4U’s leadership changed, with Mr Maxey and Ms Slade assuming directorships after Mr Twambley and Ms Wilkinson transferred their shares in 2023. The new directors decided to abolish the slot price differential, prompting the lawsuit from the founding firms, which also contested the legitimacy of the share transfers and director appointments.
Judge Cawson noted potential legal grounds for the claimants to argue a breach of fiduciary duty by the new directors, particularly concerning a conflict of interest between their roles in IL4U and Express Solicitors. This possible conflict arises because the 2013 agreement mandates that IL4U’s business operations benefit all shareholders and panel members.
Despite the challenges ahead, IL4U’s directors, particularly James Maxey, highlighted the collective’s need for financial restructuring to foster growth. Mr Maxey stated that eliminating the price differential was crucial for expansion, pointing out that panel members had been subsidising founder shareholders.
The court has allowed the claimants a brief window to seek amendments to their claims regarding the breach of fiduciary duty argument, maintaining a narrow possibility for further legal proceedings.
The High Court’s decision marks a notable turning point for Injury Lawyers 4U, as it continues to evolve in a competitive legal market. The case underscores the complexities of maintaining equitable financial structures within legal collectives and highlights the importance of clear contractual terms in steering organisational changes.
