Fenchurch Legal, a litigation funder active in high-volume claims, is facing a winding-up order. The petition was presented by Lowry Trading Ltd, an investment manager. A winding-up petition does not mean a company has already collapsed, but it is a serious insolvency step and can be a signal that there are disputes over unpaid sums or financial pressure.
To understand the significance, it helps to be clear about what litigation funding does. In simple terms, a funder provides money so legal claims can be run before any settlement or judgment is recovered. For firms handling large volumes of consumer work, cashflow can be the main obstacle. Funding is often obtained to cover case acquisition, expert evidence, insurance, disbursements and work in progress costs, especially in “no win, no fee scenarios” where money may be tied up for 12 to 24 months before settlements are acheived.
Litigation funding is essentially a form of investment in law firms allowing for cases to run before returns are achieved, ultimately supporting the law firm and presenting routes for represented access to justice on the pretence the funder will receive a return on the investment.
That model has been especially relevant in housing disrepair claims. Fenchurch’s funding has supported tenants living in properties in disrepair such as damp, mould, leaks, faulty heating and unsafe living conditions. This funding helps law firms pursue cases for tenants who would struggle to pay upfront, particularly after legal aid was removed for most disrepair work.
With litigation costs high and routes to recovery often long, a funded claims model then depends heavily on the funder itself being financially stable. If the funder comes under pressure, the risk is not confined to its own balance sheet. It can affect the firms relying on it, the pipeline of claims being pursued, and ultimately the claimants waiting for outcomes.
In high-volume areas such as housing disrepair, where margins may be tight and cases turn on steady financing, any instability at the funding level can quickly spread outward.
Litigation funding has become a sometimes necessary tool in a world where access to represented justice is expensive. Funding can widen access to justice, especially in lower-value consumer claims.
Fenchurch Legal’s network of partner firms is unclear, but the funder has appeared as a creditor in several law firm collapses in recent years which may have contributed to the current situation. When Cheshire-based Nicholson Jones Sutton Solicitors went into administration in April 2025, the firm owed Fenchurch around £2.4 million.
Nearly two years earlier, Fenchurch Legal had sought the appointment of administrators for Liverpool practice McDermott Smith, to which it was owed roughly £900,000 at the time the claims firm ceased trading.
Around this time, CEO and Founder, Louise Klouda made a statement in the Law Society Gazette insisting the claims sector remained attractive to investors.
We hope Fenchurch Legal can regain ground and resolve it’s current issues.
Author: Joseph Stewart-Doyle
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