Volume litigation business targets 30,000 new cases a year

Phil Hodgkinson

Hodgkinson: Not even scratching the surface

PURE Business Group – which owns two alternative business structures – is targeting a 150% increase in new instructions to 30,000 a year after securing a multi-million-pound funding facility.

Sandfield Capital is a new entrant to the market and will look to extend the eight-figure facility to an even bigger one if the arrangement works as expected.

PURE – set up by entrepreneur Phil Hodgkinson – is a collection of legal and other companies that currently handles over 12,000 new instructions each year in high-volume areas of consumer litigation, although it rejects two-thirds of enquiries.

PURE’s model centres on non-recourse Consumer Credit Act disbursement loans to customers, which are insured by a panel of A-rated insurers and re-insurers.

Having exited the injury market this year, the group acts for people with six types of claim: negligent wall insulation, mortgage mis-selling, undisclosed commissions, mortgage miscalculations, housing disrepair and data breaches.

Mr Hodgkinson, the group chief executive, explained that the goal was to increase the areas it targeted. He has a research and development department “looking at the next thing”, with mis-sold car finance emerging as number seven.

“By the end of 2022, we will have 10 cases types with sufficient solidity to take us through the next decade,” he predicted. The aim is to attract 30,000 new cases a year by then, and more than double turnover and profit.

He added that, at any given time, PURE was already running about 35,000 live cases, and settlement rates have been increasing for last 18 months – Mr Hodgkinson said PURE would not necessarily have more live cases in two years’ time, but it would be turning them around faster.

The company estimates that there are potentially 22 million cases in the case types it currently handles, “so we’re not even scratching the surface”, he said.

Sandfield Capital is a specialist legal disbursement funder launched a year ago by Steven D’Ambrosio, a former finance director at Close Brothers Premium Finance, which owns legal costs lender Novitas.

Mr Hodgkinson is its co-founder and non-executive chairman but said he had no involvement in operations, including funding decisions, and pointed out that Sandfield’s backers had to sign off on backing PURE too.

Mr D’Ambrosio did not disclose where its funding came from aside from “large reputable funders from the UK and beyond”. It is currently backing two other firms but PURE is its biggest client. He intends to have no more than 15 law firm clients.

He said the spread of cases was appealing, as was PURE’s approach of piloting new practices areas before launching and then scaling them.

“Having run an initial pilot with PURE from January this year, we have already seen 25% of the total funded book come to settlement resolution.

“Based upon current data, we will see 100% settlement of the pilot scheme cases within a further six months.

“That has given us the confidence to extend the facility to a significant eight-figure sum, enabling PURE to increase new case volumes significantly and pursue those cases aggressively on behalf of clients.”

The PURE group employs 450 staff, including 160 lawyers, in two offices in Merseyside. PURE Legal, a solicitors’ firm, and PURE Advocacy and Litigation, a barristers’ chambers, are the ABSs.

Mr Hodgkinson – who is better known as the chairman of football club Huddersfield Town – said he was looking to recruit another 100 people and was opening in Leeds later this year to expand the recruitment pool.

He explained that PURE operates in a different way to the traditional model by putting cases through four stages of vetting – there are 90 staff who work on case vetting – before approaching an insurer for after-the-event insurance cover.

The group also includes a technology business to build its own systems and Mr Hodgkinson said he believed PURE Legal was the only law firm that enabled clients to receive an update on their case by asking Alexa.

He said the group had left injury claims because the growing prevalence of fixed fees made them far less economic.

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