Fenchurch Legal is a specialist legal funding firm based in the UK. Unlike most lenders in the legal finance market (learn more about this market here), who offer risky unsecured loans, Fenchurch takes a safer route by providing fixed-rate secured loans directly to law firms.

They fund law firms specifically for pre-trial expenses on small-ticket consumer claims. These cases are procedural, with strong legal precedents, and the firms win or settle most of them, repaying Fenchurch from the proceeds.​

Louisa Klouda, Fenchurch Legal’s Founder and CEO has deep experience in the lending market. She was running a brokering and dealing desk at a London wealth management firm, when she identified a significant gap in the litigation finance market.

What Louisa realised is that law firms needed operational capital to handle all their small consumer cases, but no one was lending to them.

Most litigation finance firms focus on large, high-risk cases, passing the burden of risk to investors. Fenchurch, however, takes a different approach by offering secured loans for law firm disbursements—funds for pre-litigation expenses like expert testimony and court fees. By limiting their funding to small-ticket consumer cases, which are largely procedural, Fenchurch spreads risk across many cases, rather than depending on the outcome of one. Smaller firms benefit by accessing crucial funds, allowing them to take on cases without waiting for existing ones to settle.

Why Don’t Small Firms Turn to Banks for Funding?

While they could, traditional bank lending isn’t well-suited for these cases. The funding needs are often small, and frequent case turnover requires more flexibility than banks typically offer. This is where Fenchurch steps in, providing funding specifically for pre-litigation expenses, making repayment less dependent on trial outcomes. Most of their cases settle quickly, but even if a case stretches on, Fenchurch is protected by After the Event (ATE) insurance, ensuring they get paid whether the case wins or loses.

ATE insurance, a key part of Fenchurch’s model, guarantees repayment even in cases that don’t succeed. This policy covers litigation costs if the case outcome is unfavourable. Essentially, Fenchurch’s returns are insulated from the uncertainties of litigation, making it a more secure investment. With this model, they eliminate much of the risk typically associated with litigation finance, ensuring reliable returns for investors regardless of case outcomes.

How Fenchurch Works

Fenchurch’s business model stands out from other litigation funders by using ATE insurance to transform their loans into secured litigation financing. This minimises risk while maintaining strong returns.For investors, Fenchurch raises capital from external sources, pooling it with their own funds. Instead of uncertain returns tied to lawsuit outcomes, they offer a fixed-income structure with regular interest payments.

For law firms, Fenchurch provides loans for specific small-ticket consumer cases. They conduct due diligence on both the law firm and the case, ensuring strong precedents. Once ATE insurance is secured, loans are extended to cover pre-litigation costs like court fees and expert witnesses.

The process is efficient, with loans repaid regardless of the trial’s outcome. If the case is won or settled, the winnings pay back Fenchurch. If the case is lost, the ATE insurance covers the loan. This structure creates a predictable return for Fenchurch and its investors while helping smaller law firms fund essential pre-trial expenses.

In essence, Fenchurch operates more like a factoring model, securing returns based on future receivables rather than tying returns solely to litigation outcomes. The result is a more stable, diversified investment opportunity in the legal finance market.