One of the biggest firms involved in motor finance claims has reduced its annual trading losses, but continues to run with multi-million-pound liabilities.
Consumer Rights Solicitors Ltd this week reported a pre-tax deficit of £6.8m for the year to August 2025, down from £10.3m the year before.
Turnover increased from £450,000 to more than £3.5m, largely because of the recovery of disbursements on cases taken on from other firms.
Net liabilities increased from £11.3m to £18m, with £40m owed to creditors after more than a year. The accounts reveal that a loan facility of £25m was secured with litigation funder Katch Fund Solutions in December 2025, with interest charged at 24% per annum. A £9m loan was taken out with the same lender on the same terms in October 2024.
Under accounting rules, contingent fee work cannot be recognised as an asset on the balance sheet and be set against liabilities.
The company said the expected settlement values of its caseload are ‘far in excess’ of the costs associated with them, with the entire claim book estimated to be worth £72m by the end of July this year.
Director Kavon Hussain told the Gazette that his review of the business sets out 'all that we have done and continue to do to ensure business viability for the work we do'.
He explains in his notes to the accounts that the Manchester-based firm is looking at other case types in addition to its existing book of Plevin and motor finance claims. He adds that the company’s strategy is to remain within the consumer litigation sector for the medium to long term, but in the shorter term it is looking to bring in more business from a volume introducer for group claims.
The firm has continued to operate in the motor finance claims market despite the Supreme Court only giving a partial victory to the claimant sector. These claims are stayed or proceeding slowly due to the delays over the implementation of the Financial Conduct Authority’s redress scheme for motor finance customers.
The firm did receive a boost earlier this year when the Court of Appeal found that claims could be made under an ‘omnibus’ arrangement. Hussain confirmed that a number of these bunched-together cases are being progressed.
Hussain told the Gazette separately: 'In relation to motor finance claims, I would highlight that had the finance industry accepted its poor behaviour at the outset, then neither litigated cases, nor complaints would have dragged on for as long as they have. Asymmetric resources remains one of the greatest challenges for individual consumers when standing up to lender financial misconduct.’
The success rate of other financial mis-selling claims is 91%, with 3,630 settled during the year with an average payout of £716.
Writing in the independent auditor’s report, Huw Nicholls from accountancy firm Armstrong Watson, drew attention to the net losses, liabilities and outstanding loans, adding that these indicate that a ‘material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.’
