Personal injury compensation specialist Claims Direct has gone into administration.
It petitioned the High Court today to grant an administration order after requesting that the Financial Services Authority suspend its shares from trading on the London Stock Exchange immediately.
While the administrator assesses the company's position it will be able to trade and may be restructured or disposed of as a going concern.
The company announced on 1 July that it required extra capital to secure the future of the business.
It said today, however, that discussions with interested parties had failed, meaning the company could be trading insolvently within weeks and therefore an administrator had to be appointed.
Significant recent legal landmarks such as Callery v Gray are also believed to have contributed to the company's demise.
In a statement chief executive Ronnie Henderson said: "I am extremely disappointed that in my short time with the company all the hard work and sacrifices made by Claims Direct staff have not been rewarded.
"Unfortunately the total intransigence of the liability insurance industry in not acknowledging their responsibilities to our clients under the Access to Justice Act has continued to be a significant drain on our resources, despite the recent support for the new legislative regime from the Court of Appeal and the House of Lords. Indeed the results of our own test cases on the reasonableness of our premiums are expected within weeks.
"This, coupled with some poor business decisions of the previous management and the delays to the introduction of our new business model, has left the company with few options but to appoint an administrator.
"We believe that the appointment of an administrator will allow the company time to effect a restructuring for the overall benefit of creditors, employees and shareholders, thus enabling the company to move forward for the benefit of all."
A decision from the administrator is expected in the next week.
