REGISTERED NUMBER: 02210857 (England and Wales)

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2024

FOR

MSL LEGAL EXPENSES LTD

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

to

8

DIRECTORS:

N D Garner

A S Hughes

D Thakrar

C J Gibson

D A Ross

E V Parkes

SECRETARY:

S A Garner

REGISTERED OFFICE:

5400 Lakeside

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3GQ

REGISTERED NUMBER:

02210857 (England and Wales)

AUDITORS:

Allens Accountants Limited

Statutory Auditor and

Chartered Accountants

123 Wellington Road South

Stockport

Cheshire

SK1 3TH

FIXED ASSETS

Tangible assets

4

207,846

96,469

CURRENT ASSETS

Debtors

5

11,048,674

11,260,167

Cash at bank

80,375

174,755

11,129,049

11,434,922

CREDITORS

Amounts falling due within one year

6

9,592,517

9,039,484

NET CURRENT ASSETS

1,536,532

2,395,438

TOTAL ASSETS LESS CURRENT LIABILITIES

1,744,378

2,491,907

PROVISIONS FOR LIABILITIES

8

101,811

140,045

NET ASSETS

1,642,567

2,351,862

CAPITAL AND RESERVES

Called up share capital

9

50,000

50,000

Share premium

10

2,750

2,750

Retained earnings

10

1,589,817

2,299,112

SHAREHOLDERS' FUNDS

1,642,567

2,351,862

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 26th September 2025 and were signed on its behalf by:

N D Garner - Director

1.	STATUTORY INFORMATION

MSL Legal Expenses Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and will continue to have the support of the group. The directors have reached this conclusion giving due consideration to the projected future performance of the company and any potential risk that might impact the company's ability to meet its required solvency levels. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses for the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following judgements have had the most significant effect on amounts recognised in the financial statements.

Bad and doubtful debts

A key area involving management judgement and estimate is in determining the provision for bad and doubtful debts for medical, rehabilitation and hire income debts due.

Legal expenses claims reserve

Management judgement and estimate are significant in determining both the level of claims likely to be received on the legal expense insurance products sold, together with ultimate costs to be paid per claim.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration receivable and represents the total amount receivable by the company for services provided in the normal course of business, excluding value added tax and trade discounts. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the Company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery etc

-

33% on cost, 20% on cost and 10% on reducing balance

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate method, less any impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits deposits with banks and other short term highly liquid investments with original maturities of three months or less and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings or current liabilities.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Interest bearing borrowings

Interest bearing borrowing are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in the statement of comprehensive income over the period of the borrowings, together with any interest and fees payable, using the effective interest method.

Financial instruments

Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

The company enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, together with loans to and from related parties.

Debt instruments (other than those wholly repayable or receivable in one year), including loans and other accounts receivable and payable, are initially measured at present value of future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable in one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration, expected to be paid or received.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence if impairment is found, an impairment loss is recognised in the statement of comprehensive income.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Dividends

Dividends and other distributions to the company's shareholders are recognised as a liability in the financial statements in the period in which the dividends and other distributions are approved by the shareholders. These amounts are recognised in the statement of changes in equity.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 32 (2023 - 34 ) .

4.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 1st January 2024

257,232

Additions

224,656

Disposals

(220,525

)

At 31st December 2024

261,363

DEPRECIATION

At 1st January 2024

160,763

Charge for year

64,078

Eliminated on disposal

(171,324

)

At 31st December 2024

53,517

NET BOOK VALUE

At 31st December 2024

207,846

At 31st December 2023

96,469

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2024

2023

£

£

Trade debtors

6,604,178

7,230,832

Amounts owed by group undertakings

4,098,117

3,845,419

Other debtors

346,379

183,916

11,048,674

11,260,167

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2024

2023

£

£

Trade creditors

201,523

331,812

Amounts owed to group undertakings

3,892,890

4,488,916

Taxation and social security

173,142

286,836

Other creditors

5,324,962

3,931,920

9,592,517

9,039,484

7.	SECURED DEBTS

The following secured debts are included within creditors:

2024

2023

£

£

Related party loans

4,885,833

3,310,792

The company has given an unlimited cross company guarantee dated 19 September 2024 in respect of all group undertakings' liabilities to its bankers. The group does not have any funding facilities from its bankers other than a MSL Vehicle Solutions Ltd direct debit facility so any potential liabilities are limited to this arrangement.

The loan received from Financial & Legal Insurance Company Limited, a company under common control, is secured by a fixed and floating charge over all the company assets and is repayable on demand.

8.	PROVISIONS FOR LIABILITIES

2024

2023

£

£

Deferred tax

Accelerated capital allowances

50,947

22,879

Legal expenses policy

claims

50,864

117,166

101,811

140,045

Deferred

Other

tax

provisions

£

£

Balance at 1st January 2024

22,879

117,166

Provided during year

28,068

(66,302

)

Balance at 31st December 2024

50,947

50,864

Provisions for claims outstanding are determined on an aggregate basis with estimates being made on information available at the time. The basis of determining the provision incorporates the use of case estimates, average claim payments and average claim settlements.

Although provisions for claims are based upon the information currently available, subsequent information and events may show the ultimate liability to be greater, or less, than the amount provided. The methods used and estimates made are continually reviewed and any resulting adjustments will be reported in the year of settlement or re-appraisal.

9.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number

Class

Nominal

31/12/24

31/12/23

value:

50000

Ordinary

£1

50,000

50,000

1

Ordinary 'C'

£0.0000001

-

-

50,000

50,000

The 'C' Ordinary share carries no rights to income or voting and has restricted rights to capital.

10.

RESERVES

Retained

Share

earnings

premium

Totals

£

£

£

At 1st January 2024

2,299,112

2,750

2,301,862

Deficit for the year

(709,295

)

(709,295

)

At 31st December 2024

1,589,817

2,750

1,592,567

11.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Paul Wright (Senior Statutory Auditor)

for and on behalf of Allens Accountants Limited

12.	CONTINGENT LIABILITIES

The company is a member of a group registration for Value Added Tax purposes. Under the terms of the registration, each member is jointly and severally liable for the Value Added Tax liability for all members.

The group VAT recoverable/(due) at the year end was £(130,177) (2023: recoverable £55,238).

The company is also party to a cross guarantee given in respect of the group overdraft facility, which at the year end totalled £nil (2023 £35,254).

13.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

14.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is N D Garner.

15.	CONTINGENT ASSET

The company was severely impacted by a cyber attack on its IT partner in late November 2023.

In response, the company has filed a cyber insurance claim.

The company received a first payment of £173k during 2025, which has been recognised in these financial statements. A second, larger claim, for £774k is currently under review and as it has not been agreed to date, no asset has been recognised.