Affiniti Finance, one of the UK’s largest litigation funders, has gone into administration.
Regulator, the Financial Conduct Authority, has confirmed that Affiniti Finance was no longer taking on new business. No reason has been given for the business failure and it is not known what will happen to its current funding arrangements with a number of law firms and that is said to be worth millions of pounds.
Affiniti Finance was founded by chief executive Ian Cunningham and chief financial officer Nicholas Shapland in 2014. It initially specialised in loans for personal injury legal claims but later expanded its portfolio to include the financial miss-selling sector and a wider range of consumer disputes.
In September 2020, the businesses announced it had secured a £250 million capital funding stream, backed by a multi-billion dollar US-based fund. According to the annual accounts for the year ending 31 December, Affiniti had an outstanding loan worth £18.3 million secured by a fixed and floating charge over the assets.
In the past month, two other claims firms, Hampson Hughes and Pure Legal, have also gone into administration.
The claims sector has found it harder in recent years to remain profitable. The government has sought to restrict its activities by placing strict limits on the recoverability of fees, including through the Civil Liability Act, which this year denied legal costs for any whiplash claims under £5,000.