- Recent high-profile law firm collapses have exposed structural and ethical failings in legal funding and litigation finance.
- Law firms and funders must adopt transparent, aligned and sustainable funding models to rebuild trust.
The collapse of more than 15 consumer claims law firms in the past five years, including SSB Law and Pure Legal, has sent shockwaves through the sector. With over £400m in unpaid debts left in their wake, the damage has been financial, reputational and systemic. While litigation funding is under scrutiny—this summer’s Civil Justice Council working party report and its recommendations for tighter rules and Financial Conduct Authority registration for funders being the latest attempt to set a better path—the more pressing issue lies in the operational failures and incentives that led to such collapses.
To suggest that legal finance is inherently problematic would be a mistake. Funding remains a vital component in the consumer claims ecosystem. It is often the only
