Claims firm is back from the dead

A CLAIMS firm that crashed owing millions of pounds has been brought back to life by the High Court so its failure can be fully investigated.

Client Connection Ltd, which also called itself Lifestyle Claims, charged thousands of people upfront, telling them it could reclaim payment protection insurance premiums and interest for them.

Many clients found the firm simply pocketed the fees.

I warned in 2012 that the Swansea-based firm was in trouble and some of its bosses were already moving on to new companies. It was dissolved in 2013.

Now Barclays has won a court ruling to officially revive the company. The bank is claiming more than £2million, which it refunded to people who used its credit cards to pay Client Connection and were therefore entitled to compensation under section 75 of the Consumer Credit Act.

Evidence submitted by Barclays showed more than £12million left the firm shortly before it collapsed, including more than £5million paid to a connected business, with £395,000 shared by the directors. This left 2,683 creditors.

The court found that Gagen Sharma, the Birmingham liquidator hired by the directors, spent less than four hours investigating their conduct. She later told creditors there was no money to meet their claims and the firm should be dissolved.

In his judgment, Mr Justice Norris said: ‘It is not possible to be confident that Sharma got to the bottom of events so she could explain to the creditors why they were getting nothing in respect of their debts.’

Barclays is pressing for a new liquidator to be appointed to reopen the investigation.