Insolvency litigation is a highly specialised area of commercial litigation, often involving claims arising from director misconduct, wrongful or fraudulent trading, transactions at an undervalue, unlawful preferences, asset recovery and breaches of fiduciary duty. Successfully pursuing these claims requires experienced insolvency practitioners, access to specialist legal advice and appropriate litigation funding.

For insolvency practitioners, creditors and businesses dealing with an insolvent company in Portsmouth and across Hampshire, securing the right funding solutions can significantly improve the likelihood of recovering assets. At Annecto Legal, we help clients access tailored litigation financing, ATE insurance and flexible funding arrangements that allow insolvency claims to proceed while reducing financial risk and protecting the insolvent business.

Why insolvency litigation funding matters in Portsmouth

Portsmouth has a diverse business community spanning a range of sectors. When a business becomes insolvent, disputes involving directors, shareholders or third parties can quickly become legally complex and expensive.

Pursuing insolvency claims often involves considerable legal costs, including solicitors’ fees, barristers’ fees, expert witness reports and court fees. Without specialist litigation funding, many potentially valuable claims may never progress, limiting potential recoveries for creditors and office holders.

Working with experienced litigation funders enables insolvency practitioners to investigate claims and recover assets without relying solely on the funds available within the insolvent business. This allows office holders to pursue claims against directors and other parties while carefully managing litigation costs, reducing financial exposure and improving the prospects of a successful outcome.

Insolvency litigation funding options

Every insolvency case is different, so the most appropriate funding arrangement will depend on the strength of the claim, anticipated litigation costs, potential recoveries and the overall prospects of success.

Conditional Fee Agreements (CFAs) – A Conditional Fee Agreement enables solicitors to defer some or all of their fees until a successful outcome is achieved. This can reduce the immediate financial burden on the insolvent estate while allowing strong insolvency claims to proceed.

Contingency fee agreements – Under a contingency agreement, legal fees are calculated as an agreed percentage of any damages or settlement recovered. This provides transparency while aligning the interests of the client and legal team.

Assignment of insolvency claims – Certain insolvency claims can be assigned to third-party purchasers in return for an upfront payment or a share of any future recovery. This can generate immediate value for the insolvent estate while transferring much of the litigation risk.

After the event insurance – ATE insurance protects claimants against adverse costs orders if a claim is unsuccessful. When combined with other funding solutions, it can give insolvency practitioners greater confidence to pursue claims while limiting financial exposure.

Third party litigation funding – Professional litigation funders provide specialist litigation finance through structured funding agreements, usually in return for a share of any successful recovery. Funding can cover solicitors’ fees, counsel’s fees, expert reports, court fees and other litigation costs, allowing significant insolvency claims to proceed even where the insolvent estate has limited resources.

Choosing the right funding strategy

Selecting the most appropriate funding arrangement requires careful consideration of the merits of the claim, anticipated legal costs, potential recoveries and the commercial objectives of the insolvent business.

In some cases, a Conditional Fee Agreement supported by ATE insurance may offer an effective solution. More substantial or complex claims may benefit from specialist litigation funding provided by experienced litigation funders, enabling insolvency practitioners to pursue valuable claims while preserving assets and maximising returns for creditors.

Implementing the right funding strategy at an early stage can also minimise delays, improve cash flow and increase the overall prospects of success, while reducing the financial burden placed on the insolvent business.

How Annecto Legal can help

Annecto Legal works with insolvency practitioners, creditors and law firms throughout Portsmouth to secure specialist insolvency litigation funding and insurance for a wide range of claims.

We assess the merits of each case, advise on the most appropriate funding structure and work with leading litigation funders to obtain competitive funding solutions tailored to the circumstances of each claim. We can also arrange comprehensive ATE insurance to protect clients against adverse costs and help reduce financial risk throughout the litigation process.

By helping to reduce upfront legal costs, manage litigation costs, negotiate competitive funding arrangements and protect the insolvent business, we support insolvency practitioners, creditors and law firms in pursuing the best possible outcome for claims in Portsmouth.