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 together with access to specialist litigation funding.

For insolvency practitioners, creditors, and businesses dealing with insolvent companies throughout Preston and the wider North West, securing the right funding solution can significantly improve the prospects of recovering assets. At Annecto Legal, we help clients obtain tailored litigation finance, After the Event (ATE) event insurance, and carefully structured funding agreements that enable insolvency claims to proceed while reducing the financial risks to the insolvent business.

Why insolvency litigation funding matters in Preston

Preston is home to a broad range of businesses operating across various sectors. When a company enters insolvency, disputes involving directors, shareholders or third parties can quickly become complex, lengthy and expensive.

Pursuing insolvency claims frequently involves substantial legal costs, including solicitors’ fees, barristers’ fees, expert witness reports and court fees. Without access to specialist litigation funding, many strong claims may never be pursued, limiting potential recoveries for creditors.

Working with experienced litigation funders allows insolvency practitioners to investigate claims and recover assets without relying solely on the funds available within the insolvent estate. This enables office holders to pursue claims relating to director misconduct and other insolvency matters while carefully managing financial exposure and maximising return for creditors.

Insolvency litigation funding options

Every insolvency case is unique, meaning the most appropriate funding arrangement will depend on the strength of the claim, anticipated legal 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 legal fees until a successful outcome is achieved. This reduces the immediate financial burden on the insolvent estate while allowing viable claims to move forward.

Contingency fee agreement – Under a contingency fee agreement, legal fees are calculated as a percentage of any damages or settlement recovered. The percentage is pre agreed, ensuring transparency while aligning the interests of both the client and the 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 arrangements, ATE insurance gives insolvency practitioners’ greater confidence to pursue claims while limiting financial exposure.

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

Choosing the right funding strategy

Selecting the most suitable funding solution requires careful consideration of the merits of the claim, anticipated legal costs, likely recoveries and the commercial objectives of the insolvency estate.

In some cases, a Conditional Fee Agreement supported by After the Event insurance may provide the most appropriate solution. Larger or more complex claims may benefit from specialist litigation finance provided by experienced litigation funders, enabling insolvency practitioners to pursue valuable claims while preserving estate assets and maximising returns for creditors.

Putting the right funding strategy in place at an early stage can also reduce delays, improve cash flow and provide greater certainty throughout the litigation process.

How Annecto Legal can help

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

We assess the merits of each case, advise on the most appropriate funding structure and work with leading litigation funders to obtain competitive litigation finance solutions. We also arrange comprehensive ATE insurance, helping protect clients against adverse costs while providing the confidence to pursue claims.

Whether your case involves director misconduct, fraudulent trading, asset recovery, transactions at an undervalue or other insolvency-related disputes, our experienced team can source an appropriate funding solution. By reducing upfront legal costs, negotiating favourable funding arrangements wherever possible and protecting the insolvent estate, we help maximise recoveries for creditors while supporting successful outcomes for insolvency practitioners and businesses across Preston.