A litigation fund with an estimated £250m committed to motor finance claims has gone into administration. A London Gazette notice revealed that Woodville Consultants Limited appointed administrators from Kroll Advisory last week following a court hearing.

Woodville Litigation has funded more than 300,000 cases since 2019, mostly for mis-sold car finance, through working with SRA-regulated law firms.

But a group of investors in loan notes brought a contested administration order in the High Court last week.

The London restructuring and insolvency team from law firm Crowell & Moring has been instructed by Kroll to assist in the bankruptcy, liaise with the Financial Conduct Authority, and aid the recovery process from UK law firms.

It is understood the suspension of the FCA redress scheme meant that law firms could not progress cases and make recoveries to repay Woodville. There are also allegations against the directors of Woodville and other parties involved in the selling of loan notes in the investment scheme.

In an update to investors which has been shared online, Kroll said it had visited Woodville’s Wales office last week to secure records, assets and financial information.

According to Woodville accounts covering the year to 26 December 2024, the company reported turnover of £56m and pre-tax profit of £4.3m. Woodville had assets of around £253m, including £17.3m of book loans due from law firms to related company Horizon Legal Limited.

The litigation funding market for car finance claims has grown quickly in recent years and was spurred by last summer's Supreme Court ruling establishing that motorists who made unfair commission payments should be compensated.

The FCA has attempted to remove law firms from the redress process through its own compensation scheme but this is subject to legal challenges and payments are unlikely until next year at the earliest.

In April this year, another litigation funder enabling volume claims, Fenchurch Legal, went into administration over issues with investors.

North west firm Bott and Co, said its claims are not affected because it does not rely on third parties to provide backing for motor finance claims. It said: ‘Being self-funded means Bott and Co has greater control over how we manage and progress claims. We are not dependent on external litigation funding, allowing us to focus solely on achieving the best possible outcome for our clients.’