Litigation Funder SpectraLegal Limited Faces Compulsory Strike-Off Order and Winding Up Process

Litigation funder SpectraLegal Limited, once a major player in the legal finance sector, is now facing a compulsory strike-off order and is in the process of being wound up. The company, which had been incorporated in 2014, has not been operational for several months, failing to file its latest accounts and ceasing all lending activities.

SpectraLegal was known for its specialized funding schemes for specific case areas, such as mis-sold business energy claims and mis-sold PPI claims. The company had promised to help law firms with cash flow and investment opportunities, attracting clients with testimonials and a presence at legal conferences.

In 2019, SpectraLegal secured a significant facility of £100m to finance disbursements, with plans to expand its reach and form new partnerships. However, challenges in the claims market, missed opportunities, and delays in the civil justice process have impacted the company and the broader litigation finance market.

This development comes in the wake of other litigation funders like Novitas and VFS Legal facing difficulties, with some exiting the market or entering administration. Despite these challenges, some firms like Doorway Capital remain committed to supporting the legal sector, offering new lending facilities for law firms.

The closure of SpectraLegal marks the end of an era for the company and serves as a cautionary tale for the evolving landscape of litigation finance. As the industry continues to adapt to changing conditions, firms will need to navigate challenges and explore new opportunities to thrive in the legal market.