Asons Solicitors Receive Controversial Bail Out From Local Council (Copy)

Last week it was revealed that Bolton County Council has awarded a ‘secret’ emergency grant of £300,000 to Bolton based claimant solicitors firm Asons Solicitors Ltd.[i]

The award was made by Bolton Labour leader, Cliff Morris, under the Emergency Powers Procedure (EPP), in a meeting which was closed to the press and public. Bolton Council’s constitution describes the EPP as the:[ii]

‘Authority to take any action on behalf of the Council in any cases of urgency’.

However, there is a procedure which must be followed before this power can be exercised which includes:

• Consultation to be undertaken by the officer seeking to use emergency powers with the relevant Scrutiny Committee Chair(or Vice Chair) with an explanation given as to why the EPP is being used.
• The Executive Cabinet Member (Councillor Morris) is authorised to take the decision but the relevant opposition members should be informed of the action proposed.
• A report should then be submitted to the next meeting of the Executive Cabinet Member for information detailing the actions taken and the reasons why.

Notwithstanding these requirements, opposition leader and Tory Councillor, David Greenhalgh, has insisted that he was unaware of the Asons grant decision until the day of the leader’s meeting when the report on the issue was submitted (although Councillor Morris maintains that Mr Greenhalgh was copied into correspondence from the start of the process).

Cliff Morris has explained that the grant was intended to assist the firm with its move to different premises earlier in the year and to ensure that the 263 jobs tied to the firm are retained in Bolton for the next five years after the firm had suffered losses in the previous financial year. In a statement Cliff Morris said:

‘The council’s investment will be repaid through their business rates, which we estimate to be more than £460,000 and this will be reinvested across the borough. This is on top of the value from retaining the firm in the town centre, which should return £10m to our local economy over the next five years’.

However, the controversy surrounding this grant has increased following revelations in Asons’ annual accounts that HMRC are attempting to recoup exactly £300,000 in relation to PAYE/NIC due as a result of previous profit extractions that are chargeable as earnings from employment. [iii]

Doubt has also been raised over likelihood of repayment of the ‘investment’ due to Asons themselves, in their annual accounts, listing the recent PI reforms as ‘the key risk facing the business.

Other local solicitor firms have also been criticising the grant, with one partner at a rival claimant firm reportedly stating:[iv]

‘This is extremely worrying. Law firms up and down the country have been subjected to the same challenging market conditions as Asons, so why has it been given preferential funding?’

Another Lancashire solicitors firm has said that they intend to report the grant to the National Audit Office to see if further action is required. It stated:[v]

‘The local health services are under pressure and the council itself has announced redundancies, so you have to ask how it can afford to do this’.

Alongside these criticisms, some news sources have highlighted the apparently close relationship that Asons CEO, Dr Imran Akram, has with many prominent Labour politicians, including, the Bolton Labour leader Cliff Morris, Labour Party Leader Jeremy Corbyn and London Labour Mayor Sadiq Kahn. The following picture was featured on a local Liberal Democrat news page:[vi]

Tory leader for Bolton council, Mr Greenhalgh has put a motion forward for the council’s next full meeting on 30 November asking for a named vote. The motion will state:

‘This council disagrees and disapproves with (sic) the decision made by the leader of this council, made under Emergency Powers, to award a grant of £300,000 to Asons Solicitors towards refurbishment and occupation of their offices at 40 Churchgate, and agrees to issue a public statement to the residents of Bolton stating thus.’

Each member of the council will have to state publicly whether they agree with this statement.[vii]

Other opposition parties, including the Liberal Democrats and UKIP are currently preparing questions and motions for the upcoming council meeting at the end of the month. UKIP chief for Bolton Sean Hornby has called on residents to protest outside the town hall before the meeting goes ahead.[viii]

The lack of information provided by Bolton Council has prompted a member of the public to submit a freedom of information request, requesting the following information:

-          The justification for the grant

-          Any applicable terms and conditions

-          The specific council budget from which the money was/will be provided

The response to this request is due from Bolton Council no later than 12^th December 2016.

Many readers will of course be familiar with Asons due to their significant presence in the NIHL market. In 2013 Dr Imran Akram, pictured below, announced an ambitious expansion plan, including, doubling in size by taking on 300 new employees, investing £8m into creating a new office building with a gourmet restaurant and glass projection technology and opening branches in Singapore, Dubai, New York and Pakistan as well as London.  This was part of their intention to be ‘the last man standing’ after the Jackson reforms.

Image: Proposed New Ason Offices [ix]

However, these plans did not pan out and Asons suffered a particularly difficult financial year with their annual accounts for the year to 31 May 2015 showing a pre-tax loss of £1.14m on annual turnover of £13.6m. This compares with a profit of £864,444, on turnover of £15.9m in 2014. The accounts also show that in 2014/15 Asons purchased goods and services of £2.1m from Yourclaimlawyer Ltd, whose sole shareholder is Irfan Akram, a sibling of Kamran Akram.^[x]

As a result, the £8million investment into the new office was put on hold in December 2015 with fears reported that instead of 300 new employees being taken on, there would have to be redundancies.[xi] Instead, in August of this year, Asons moved into a four storey building, formerly belonging to Bolton News, costing £1.1m which boasts a range of features including a pool table, newly fitted kitchens with all modern conveniences, football table, a Samsung smart TV in every room and area, four meeting rooms, lockers, coat rails, lounge furniture in the Asons Hangout, a timeline wall detailing the history of Asons, a coffee room, staff holiday photo wall, a faith room with ablution facilities and rooftop lounge garden for future barbeques.

Asons finally responded to the criticisms yesterday afternoon by releasing a media statement which accused local rival solicitors firms of waging a ‘smear campaign’ against them. The statement said:[xii]

‘It’s disheartening to see the criticism that the awarding of this business grant has attracted, including the judgemental, sanctimonious and opportunistic comments from other local law firms and solicitors. Our competitors have been assuming the worst based on limited information, and using social media and comments sections to employ dirty tactics. Asons has been the victim of a smear campaign. Small law firms are using this grant scheme award as an excuse to pursue their own agendas’.

In relation to the new offices that Asons have moved to, they said:

‘The lease on Asons’ previous offices was due for renewal and it was a case of relocating or being tied into a new five-year lease of premises that no longer suited our needs. £1.7. in funds were spent on the building, and this can be broken down as £1.1m for the purchase of the property and £600,000 in total on the refurbishment and interior’.

They refuted the allegations that the new office has a games room or a roof terrace, although they did admit that they had a football table and other facilities designed to ‘boost employee morale’.

In relation to the grant itself, the statement read:

‘The Bolton council business grant is a confidential matter, but a councillor chose to betray that confidence and leaked the details. Many other business receive the same type of funding. Asons have ploughed this grant back into supporting the Bolton economy by hiring local contractors and suppliers for the refurbishment’.

Asons say they are neither 'incredibly wealthy, nor in serious financial trouble or close to being dissolved’.