Litigation specialist says pandemic has proved the case for its technology
Cheadle-based ME Group Holdings has announced a five-fold increase in pre-tax profits to £13.1m for year ending March 31, compared with £2.6m the previous year.
Group turnover nearly tripled to £36.45m, from £13.88m in 2019.
This marks the third consecutive year of exceptional growth since ME Group began trading in August 2017.
ME Group uses proprietary LegalTech to deliver analysis services to solicitors to enable them to determine whether consumers have a valid case in complex financial disputes.
The group also provides litigation funding that is required to enable the solicitor to act in that dispute.
Group chief executive, Rob Cooper, said: “We have made excellent progress in restructuring the group to create ME Group’s litigation funding arm (ME Funding).
“Litigation funding is a fast growth UK alternative asset class which is receiving increased interest from global investors.
“We also concluded a partnership with Forbes Ventures to deliver the first securitisation of UK consumer litigation funding.”
He added: “We have successfully implemented our revised strategy to become a fully-fledged end-to-end platform for managing complex consumer disputes.”
Bruce Walker – executive chairman – and chief credit officer Rob Cottingham were appointed in August to head up ME Funding, which Mr Cooper said “adds significantly to the strength of our executive team. They will also make sure the group’s credit function is separate from the LegalTech division to remove any potential conflict.”
Looking ahead, he said the group is forecasting double digit growth during the next 12 months as it develops next generation technology to facilitate the resolution of complex financial disputes.
“The lockdown underscored the value of technology for the dispute resolution industry, which would have ground to a halt without it.
“Technology will become the norm for dispute resolution, not least because law firms and the public they serve have seen how technology both improves the quality of the customer journey and is much cheaper to use.”
Mr Cooper said demand was also being driven by poor practice in the financial services industry, where, he claimed, commissions and performance payments between financial wervices providers and intermediaries have distorted selling practices to the detriment of the retail customer, especially vulnerable consumers.
He said: “ME Group is here to help law firms gain redress on their clients’ behalf, and help regulators make quick settlement decisions. This is especially the case right now with UK personal finances under increased pressure from the impact of the pandemic and a severe economic downturn.
“As a result, we expect to scale up our proposition this coming year, including recruiting more talent, to enable us to support more and more law firms with their work in this sector.
“COVID-19 proved the group’s technology capability, and the uncorrelated nature of litigation funding as an alternative asset class has only sought to increase appetite from credit investors.
“Our ethical and rigorous approach to governance, combined with our unique LegalTech, means that we are able to manage credit risk in ways that other market participants simply can’t.”
He added: “Our strategic partnership with Forbes Ventures, to deliver securitisation of UK consumer litigation funding, presents the group with a significant opportunity which will form a key part of our future strategy.”