Another volume consumer claims firm goes down owing £37m

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Car finance claims: Firm struck loan deal last year

Another law firm specialising in volume consumer claims has collapsed, with administrators called in yesterday at Liverpool-based McDermott Smith Law.

Its most recent abbreviated accounts, for the year to 31 March 2023, said it owed creditors £37.5m.

After a notice to appoint administrators was filed on Monday at the instigation of litigation funder Fenchurch Legal, yesterday Andrew Hosking and Sean Bucknall of Quantuma Advisory and Damian Webb of RSM UK Restructuring Advisory were appointed joint administrators.

Meanwhile, the Solicitiors Regulation Authority (SRA) announced today that it had intervened in McDermott Smith as a result of an “insolvency event”.

McDermott Smith handled housing disrepair, motor finance, business energy, undisclosed commission, personal injury, Japanese knotweed and debt claims.

The accounts showed huge expansion between 2022 and 2023, with creditors going from £5.8m to £37.5, debtors leaping from £6m to £37m, and staff numbers nearly trebling from 24 to 69.

Law Society records, however, show that only four solicitors were working at the firm, including founder Andrew Smith.

Companies House shows also that in May 2023 McDermott Smith agreed a funding deal with Katch Fund Solutions to back motor finance claims.

Katch was a major backer of consumer claims firm SSB Group, which went into administration at the start of the year.

Mis-sold car finance is tipped as the next big growth area for consumer claims and was part of why the SRA recently issued guidance on claims management activity.

Mr Smith has not responded to an approach for comment that we made earlier this week.

We recently released a recorded webinar, Motor Finance Mis-selling Explained, while our inaugural Claims Futures conference on 12 November will consider the regulatory and other issues involved in volume consumer claims.

Readers Comments

• Law Follower says:

  July 7, 2024 at 5:46 am

  Yet another consumer litigation form goes bust owing tens of millions to funders. How many wheels has the SRA been asleep at now?

  Reply
• Nick McCormick says:

  July 31, 2024 at 12:27 pm

  Who is handling McDermott Smith Affairs have an outstanding case with them?

  Reply
• Ian Bowdler says:

  August 6, 2024 at 6:29 pm

  I’ve got a claim going through with them at the moment what will happen to that now ????

  Reply
• Willis Tshibangu says:

  August 15, 2024 at 1:13 pm

  Housing disrepair claim with Alex Smith, Lindsay Witterick as a solicitors from McDermott Smith law Ltd. My case has not been completed, all the repairs not been done as stated in the county court. The defendants offer was given as stated in 18 April 2024 (payment within 28 days) and accepted the offer but did not received the relevant money to date for settlement. Please whom to contact??????

  Reply
• Rosie McDonagh says:

  August 20, 2024 at 1:16 pm

  There’s a Facebook Group for SSB Law Victims – these are victims of another law firm collapse that did the same sorts of things the firm you’re involved in did… They’ve made some progress, and are on the SRA’s back. I also suggest you get in touch with Liverpool World, and tell them that there’s a journalist at Burnley Express working on the SSB law story, which is very much the same as this – and try and get some press coverage…. The SSB group are meeting with the Solicitors Regulation Authority, going to the Houses of Parliament etc… there’s a good opportunity to work together, the more people working together the better… I’m in the SSB group. One final bit of advice, if they try and bump you off to another law firm, be very careful….

  Reply
• Trish Greig says:

  August 22, 2024 at 5:34 pm

  I have had an ongoing claim with Mcdermott Smith Law for 3 years for PCP. I was one of the first to put a claim in. What happens now?

  Reply
• John ball says:

  September 19, 2024 at 12:07 pm

  I had claim going on with them they said they past it on to sister company few months bck but got no details off them what do I do bin 3yrs going on for

  Reply
• Sean Argue says:

  October 3, 2024 at 10:11 pm

  McDermott was dealing with my claim for finance company getting commission i was not aware off

  Reply

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