Personal injury firm Invaro collapses into administration

Invaro, a personal injury company, which claimed it would restore respectability to its controversial sector, has gone into administration two years after it was founded.

Invaro, a personal injury company, which claimed it would restore respectability to its controversial sector, has gone into administration two years after it was founded.

Some 70 employees have been sacked from the Liverpool-based company, which went into administration earlier this week.

Invaro's chairman was Terry Lindon, who was linked to another no-win, no-fee personal injury firm, Claims Advance, which has also gone into administration.

Industry sources said Claims Advance owed its banks £26m and left about 8,000 individuals on its books unable to complete their cases for redress for accidents.

The collapse of Invaro is the latest in a string of failures in the accident claims sector. Claims Direct went into administration in 2002, leaving investors owed hundreds of thousands of pounds. It attracted the nickname "Shames Direct" when it emerged that many of its clients had had to pay expensive insurance premiums out of their compensation winnings. The demise of Claims Direct was followed last year by The Accident Group, which closed after its banks withdrew support.

As recently as January this year, Invaro hired a heavyweight board in order to grow its presence in its sector. Mr Lindon said at the time: "Our business model, based on rigorous quality controls of claims, has seen us strengthen as other providers have fallen away. It is time for the leaders of this market to start building a robust and effective replacement to legal aid."

Invaro, which said it was processing 2,000 claims a week with 80,000 cases on its books, had also hired the City public relations advisers Weber Shandwick to help restore the image of claims advice companies. At the time, Steve Leigh, the deputy managing director of Weber Shandwick, said: "A huge credibility issue has arisen in this sector because of the high-profile collapses. Invaro is an enormously exciting client as they are willing to take the lead in reclaiming the initiative from this brand of sales-focused, fly-by-nights."

Mr Leigh, who subsequently left Weber Shandwick to work for Invaro full-time, said yesterday he had been sacked along with the other employees.

The accountants Smith & Williamson have been appointed as administrators. The firm is trying to reorganise the business so that elements of it can continue within a new company.

The business is backed by Japanese pension funds and loans to customers of Invaro were extended by a company based in London and Montreal called Anglo Canadian Securities.