LONDON – A company that helped finance large-scale car finance claims has entered administration after experiencing financial difficulties, with insolvency specialists now investigating its finances and attempting to recover money for creditors.

Woodville Consultants, a funder of law firms pursuing consumer claims, has entered administration after an application by one of its creditors to the courts [1]. Administrators Kroll, an insolvency firm, will look into the company's finances.

The development affects investors who backed the litigation funder rather than motorists pursuing car finance claims, and does not alter the Financial Conduct Authority's (FCA) car finance redress scheme for consumers with eligible motor finance agreements.

What Happened?

According to reports, Woodville raised money from investors through loan notes and bonds before lending those funds to law firms involved in large consumer litigation, including claims linked to the UK's car finance scandal.

The company's most recent accounts reportedly showed a loan book of around £249 million, while more than £240 million was owed to investors through bonds and other borrowing [2]. Kroll has now been appointed to establish the company's financial position and investigate its affairs.

Investors had previously reported delays in receiving repayments, with the company citing slower-than-expected returns from litigation funding.

How Litigation Funding Works

Litigation funding is a rapidly developing way to finance complex claims. Law firms do not need to pay legal costs, they can get funding from specialist finance companies. If cases are successful, the funder will receive an agreed return on investment. Returns can be delayed on unsuccessful claims or those that take a long time to conclude.

The model has been used across a range of commercial and consumer disputes, including car finance mis-selling litigation.

While litigation funding can help claimants pursue legal action without paying upfront legal costs, investors accept the commercial risk that cases may not generate returns within the expected timeframe.

Separate From the FCA Compensation Scheme

Although Woodville was involved in funding litigation connected to mis-sold car finance, its administration does not mean that the FCA car finance consumer redress scheme has changed.

The regulator announced its compensation scheme earlier this year following its review of historic commission arrangements in the motor finance market [3]. Around 12.1 million agreements may fall within the scope of the scheme [4], with average car finance compensation estimated at approximately £829 per eligible agreement, although individual payments will depend on each case.

Implementation of parts of the scheme remains subject to ongoing legal challenges [5], but the administration of a litigation funder does not determine whether consumers remain eligible for a car finance refund or a PCP refund.

Previous Regulatory Attention

The collapse has also renewed attention on litigation funding arrangements more broadly.

The FCA previously imposed restrictions on a related regulated business, Integrity Protect No. 1 Limited, requiring it to take steps to prevent certain connected companies from promoting investments while regulatory concerns were considered [6]. The restrictions formed part of the regulator's wider oversight of investment promotions and were separate from its review of motor finance commission arrangements.

The administration of Woodville is expected to examine how investor funds were raised, managed and deployed, with administrators now responsible for assessing the company's assets and liabilities.

What It Means for Motorists

For consumers considering PCP claims, PCP finance claims, or other motor finance claims, the administration is unlikely to have any immediate impact on the FCA's redress process.

The regulator's compensation scheme remains a separate process, with lenders continuing preparations while legal proceedings over aspects of the scheme continue.

Instead, the latest development highlights the financial risks faced by investors who fund large-scale litigation. As claims linked to the UK's car finance scandal continue to progress, attention is likely to remain on how litigation funding is structured and supervised alongside one of the country's largest consumer compensation exercises.

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References:

1. Woodville Consultants, a funder of law firms pursuing consumer claims, has entered administration after an application by one of its creditors to the courts - https://www.telegraph.co.uk/business/2026/07/17/fund-car-finance-claims-collapses-250m-blow-investors/
2. The company's most recent accounts reportedly showed a loan book of around £249 million, while more than £240 million was owed to investors through bonds and other borrowing - https://www.thetimes.com/business/companies-markets/article/woodville-consultants-administration-investigation-car-finance-scandal-5k7dqpw2d
3. The regulator announced its compensation scheme earlier this year following its review of historic commission arrangements in the motor finance market - https://www.fca.org.uk/publications/policy-statements/ps26-3-motor-finance-consumer-redress-scheme
4. Around 12.1 million agreements may fall within the scope of the scheme - https://www.fca.org.uk/publication/policy/ps26-3.pdf
5. Implementation of parts of the scheme remains subject to ongoing legal challenges - https://www.fca.org.uk/news/statements/motor-finance-scheme-partially-suspended
6. The FCA previously imposed restrictions on a related regulated business, Integrity Protect No. 1 Limited, requiring it to take steps to prevent certain connected companies from promoting investments while regulatory concerns were considered - https://www.fca.org.uk/publication/supervisory-notices/second-supervisory-notice-integrity-protect-no-1-limited.pdf