Major lender to legal sector has gone in to administration

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Leading legal lender VFS Legal has gone into administration, leaving law firms at a loss for financing.

The company, which specialises in funding low value litigation claims, has provided more than £250 million to the legal market over the past 12 years.

From the year to 30 June 2022 VFS’s most recently filed accounts put its trade debtors at just below £50 million and creditors at nearly £39 million.

Founder and CEO of VFS Norman Kenvyn cited a change in the company’s wholesale funder as the cause of its fall into administration.

At present, the company’s future is unclear. Sarah Collins and Mark Firmin, of Alvarez Marshall, have been appointed as the company’s administrators and will also be reviewing Virtual Business Operation Services, the supporting service company of VFS.

Collins and Firmin are exploring options for the company, including:

• finding a buyer; and
• collecting current book debt.

Speaking to Legal Futures Kenvyn said: “It’s extremely disappointing for a profitable SME with a reputation for introducing innovative funding solutions to the legal sector to help our clients, the law firms; for them to deliver access to justice to their clients, the consumer.”

There have been concerns raised about how VFS’s administration may impact Slater & Gordon (UK) LLP, however the firm released a statement saying that VFS’s administration “has not come as a surprise to us” and that it isn’t “anticipated to have any impact on our day-to-day business”.