A litigation funder will close after posting an £87 million loss, The Law Society Gazette has reported. The figure stands as the hardest number in a story that touches lawyers, claimants and the wider third-party funding market in England and Wales.

The £87 million loss forced the funder's hand. Closure follows. For solicitors who rely on third-party capital to bring claims, the departure of another backer tightens an already selective market.

What does the closure mean for practitioners?

Litigation funding underwrites large commercial disputes, group actions and consumer claims across the UK. When a funder exits, firms must find replacement capital for live cases or absorb the risk themselves.

The practical consequences are immediate:

• Live funded claims may need a new backer or a renegotiated agreement.
• New matters will face fewer funding options and, likely, tougher terms.
• Claimant firms building books on funding lines should review exposure now.
• Defendant interests may see settlement leverage shift where funding wobbles.

The £87 million loss signals that funders themselves carry real balance-sheet risk. Funding is not free money. It is an investment business, and investment businesses can post nine-figure losses and shut their doors.

How did the market get here?

Third-party funding has grown into a fixture of English litigation over the past two decades. Funders bankroll claims in exchange for a share of any recovery. If the claim fails, the funder typically loses its stake.

Losses of this scale show the model's sharp edges. A single large adverse outcome, or a run of them, can erase years of returns. The Gazette's report of an £87 million loss puts a number on that exposure.

For the profession, the lesson is diligence. Firms should treat a funding agreement as they would any counterparty relationship: check the funder's capital position, ask about portfolio concentration, and plan for the possibility that the money stops.

What should lawyers watch next?

The closure removes capacity from the market at a time of heavy demand. Group litigation, competition claims and mass consumer actions all compete for a finite pool of capital.

Lawyers running funded portfolios should take three steps in the coming weeks. Map every matter that depends on the closing funder. Open conversations with alternative funders early, before a funding gap becomes a credibility problem with clients or the court. And review retainer and funding documents for what happens on a funder's insolvency or withdrawal.

The £87 million figure will ripple beyond one firm's books. It is a reminder that the machinery behind modern litigation depends on capital that can leave as quickly as it arrived.

Global Law Wire will follow this developing story as further details of the closure emerge.