A claims firm with seven offices across the south west has been sold to national practice Simpson Millar.

The Gazette understands that a deal was agreed on Tuesday afternoon for Simpson Millar to acquire the assets and trading name of serious injury specialist Novum Law. It is not known at this stage what plans are in place for Novum staff and offices. Novum Law’s website states that the firm is now a trading style of Simpson Millar.

Consumer firm Simpson Millar completed the acquisition from the Novum Law administrators, Stephen Katz and Asher Miller of Begbies Traynor Group.

Simpson Millar has confirmed that all impacted clients have been made aware of the transition.The firm's chief executive Greg Cox said: 'We are delighted to welcome many new clients and colleagues to Simpson Millar. We are also pleased to have been able to help support the closure of the Novum practice.

'My colleagues in our injury practice area are working hard to communicate the changes and ensure that the transition for clients is seamless.

'We know that although some firms in our part of the sector are thriving, many others are facing challenges from the impact of change like fixed costs, court delays and similar.'

Less than two years ago Novum Law appointed chief executive Sally Calverley who suggested that the business had ‘huge potential for growth’. It is known nationally for its work on serious injury and medical negligence and was this year recognised by legal guide Chambers and Partners as one of the best PI firms in the south west. The firm has offices in Bristol, Cardiff, Isle of Wight, Plymouth, Salisbury, Southampton and Swindon.

Court documents show that in February its parent company Nhlex Limited was served with a winding up petition by HM Revenue & Customs. It is understood that Novum Law obtained a validation order to ensure it could continue paying salaries and other essential outgoings.

Companies House records show that eight out of the firm’s 17 directors left their role in the last year, following auditors’ reports of ‘material uncertainty’ about the business as a going concern.

In January last year, auditors Kreston Reeves noted in Novum’s annual report that the company had ‘breached financial covenants’ with its key finance provider and was reliant on financial support. The auditors' report continued: ‘The company is dealing with challenging conditions and management of cash flows. There is an inherent uncertainty around the timing of cash receipts due to the nature of the company’s principal activities.’

Accounts for the year to 30 April 2022 – the most recent that are publicly available – show that Nhlex Limited made a post-tax loss of £1m, down from a profit of £407,000 the previous year. Turnover dropped 11% to £6m during the year. The business employed 72 people as at April 2022.

Director Mark Cullingford had reported in January 2023 that the firm faced a number of risks and uncertainties, including staff retention, case progression, competition from other legal practices and changes in the legal industry.

At the end of the 2022 financial year the company reviewed its financial position as income receipts were ‘materially lower’ in the previous three months. That followed delays in cases progressing and therefore delays in getting paid.

After the reporting period, the company entered a ‘period of agreed forbearance’ in debt repayment with one of its secured creditors and negotiated more time to pay debts owed to HMRC.

It is understood that specialist law firm funder Doorway Capital was a major secured creditor of Novum (although it had not invested in the firm itself). Doorway is the owner of Simpson Millar.

 

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