Minster Law has announced the successful conclusion of a transformative three-year journey that enables the firm to handle low-value whiplash claims profitably.
Yorkshire-based Minster Law, which has seen a notable transition from a £4.7m loss in 2022/23 to a £503,000 pre-tax profit in 2023/24, credits this financial turnaround to a strategic overhaul. The firm’s turnover also increased by 15% to nearly £37m.
Minster Law operates not on a direct-to-consumer basis but rather collaborates closely with insurers. The firm’s portfolio broadened after acquiring Irwin Mitchell’s fast-track book in 2021, which channels personal injury work that Irwin Mitchell opts not to manage.
The reforms to whiplash claims, instituted in May 2021, have significantly altered the personal injury market, reducing margins on road traffic claims with a value of up to £5,000 and subsequently decreasing claim volumes. Chief Executive Shirley Woolham expressed that continuing with the conventional volume approach was no longer viable as income per case had markedly declined.
Woolham explained that the firm recognized early on the need to abandon solely volume-focused strategies to ensure profitability. The company underwent a radical redesign in several areas, including cost-to-income ratios, process engineering, and internal restructuring. This included bringing in new skills and technology to foster client and shareholder value, resulting in a £5m improvement in profitability and achieving a £2.5m EBITDA for 2023/24, exclusive of exceptional items, in challenging market conditions.
Profitability is also being achieved through handling whiplash cases processed via the Official Injury Claim portal, though Woolham noted that achieving scale was crucial. However, she emphasized that scale does not equate to functioning as a volume claims factory; prioritising positive customer outcomes remains essential.
Minster is effectively operating as an extension of insurers’ brands, striving to balance operational efficiencies with customer satisfaction. This balance may explain the three years required to establish their current model.
In addition to handling whiplash cases, Minster Law has experienced nearly a 50% increase in road traffic accident serious injury cases over two years. Consequently, 188 of its 508 staff are now dedicated to this area. With plans to announce new partnerships in serious injury soon, the firm is keen on expanding this division further, considering both organic growth and acquisitions.
Woolham clarified that any acquisitions would be strategically focused to unlock new markets rather than merely increasing case numbers.
Minster Law’s strategic realignment in handling low-value claims and serious injury cases demonstrates a forward-thinking approach, fostering both growth and client satisfaction in a challenging legal landscape.
