Luxembourg: Home of Katch
Katch Fund Solutions – which is funding consumer claims worth hundreds of millions of pounds – has put its litigation fund into liquidation, it has emerged.
It blamed the “prolonged resolution timelines” of motor finance claims as the main reason for the decision as it moves away from financing individual consumer cases to focus on commercial litigation instead.
Katch has become a major player in the claims market. It was one of the largest backers of collapsed Sheffield firm SSB Law, providing both disbursement funding and working capital. At the time SSB went bust at the start of 2024, it was owed £63m, including £16m in interest, and had the benefit of three debentures.
Katch also supported motor finance claims at Liverpool firm McDermott Smith, which collapsed six months later, owing the funder £7m.
It is currently funding an estimated £18bn claim on behalf of thousands of people with Plevin claims – which concern undisclosed commissions paid on the sale of payment protection insurance – although earlier this year a judge refused to make a group litigation order.
Katch has agreed a litigation budget of more than £10m and also provided a £10m indemnity for adverse costs.
A letter to investors in August seen by Legal Futures from Laurent Jeanmart, a director of the Luxembourg-based fund, said the board has decided to self-liquidate its sub-fund, Katch Litigation Fund, from 1 September.
“This decision has been made with the best interests of the Investors in mind, considering current market conditions and liquidity constraints within the portfolio,” he wrote.
“As market dynamics have evolved, the company has faced increasing liquidity challenges stemming from the prolonged resolution timelines of the PCP (motor finance) claims portfolio.”
Mr Jeanmart said Katch had initially anticipated that claims would settle during 2025 but following last August’s Supreme Court judgment and subsequent Financial Conduct Authority announcements, “the first settlements unlikely to occur before 2026 – without clarity on the exact timing within that year”.
He went on: “Given the level of pending redemptions and the absence of near-term liquidity events, the board believes that a structured liquidation process represents the most effective course of action to maximize recoveries and ensure that capital is returned to all investors on a fair, equitable and pro-rata basis.”
According to the Katch website, the fund aimed for an annualised return to investors of 8-16%.
Katch has instead “strategically refocused its efforts toward financing portfolios of commercial claims… rather than pursuing large volumes of individual consumer claims”.
This is the Katch Legal Lending Fund, which targets an annualised return of at least 20%.
The letter continued: “While we continue to view the financing of [motor finance] claims as having represented an attractive and well-timed opportunity, we see limited prospects for replicating such transactions going forward.
“This underlines our decision to bring this line of activity to a close and to redeploy resources toward strategies offering greater scalability and more consistent deal flow.”
Mr Jeanmart concluded: “We understand that this decision may be disappointing. However, we believe it is the fairest and most transparent way to manage the fund’s wind-down, ensuring equal treatment for all investors while maximizing value recovery.”
Katch put the market value of the fund as of June 2025 at £422m, with nearly half of it made up of litigated and non-litigated motor finance claims, valued at £46m and £160m respectively. Plevin (£63m) and ‘mortgage prisoner’ claims (£62m) made up another 15% each.
It has also lent an unnamed law firm £43m in working capital.
However, in an update sent to investors in October – after the FCA had outlined its plan to deal with motor finance claims – Katch reduced the value to £358m.
This was on the basis that the claims would generate average damages of £1,100 (including interest) rather than the £1,973 it had expected, while the number of claims in the portfolio had reduced by 5% after ineligible ones were removed.
Katch declined to comment when contacted by Legal Futures. “We will update investors directly through our usual communication channels,” it said.
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