Legaltech platform Immediation calls in administrators after raising millions

Immediation, a digital conflict resolution platform designed with small businesses in mind, has collapsed into administration after previously securing millions of dollars of investor funding.

Founded by former barrister Laura Keily in 2019, Immediation was designed to provide courts, tribunals, and law firms with a digital alternative to traditional dispute resolution processes.

The platform includes video and text chat functions, tools allowing legal experts to assist their clients remotely, and options to sign binding agreements once the dispute is resolved.

Bringing those functions into a custom virtual platform could drastically accelerate and expand access to the mediation process, Keily said in 2019.

Small businesses without deep pockets would also benefit from a cost-effective alternative to regular court proceedings, she added.

“I just found that it was basically impossible for anyone to navigate the court system unless they were an ASX-listed company or had enormous resources,” Keily told SmartCompany at the time.

Immediation secured a $3.75 million Series A funding round in December 2020, after the COVID-19 pandemic forced courts and law firms to rapidly adopt new digital technologies.

The pandemic also caused a tidal wave of commercial disputes between small businesses, lenders and landlords, contributing to the demand for mediation services.

After being used in the Federal Court of Australia, and state-based forums like the Victorian Civil and Administrative Tribunal, Immediation expanded its client base to include the New Zealand Ministry of Justice.

In August 2022, the business accrued an extra $5 million in funding through institutional and private investors, a boost Immediation said would help support its growth in the United States, along with Europe, the Middle East, and Asia.

In March this year, Immediation received another $2.8 million from its existing backers, in a move the company said would ensure its “commercial momentum” and power its continued global expansion.

At the time, Immediation also announced Keily would step down as CEO to “pursue other endeavours”.

The company said chief financial officer Anthony Rule would liaise with the executive leadership team as the business conducted a search for a new permanent CEO.

The company now counts more than 10,000 cases heard on its platform, and adoption by 97 separate state and federal agencies.

Administrators chart path for legaltech firm

However, documents shared by the Australian Securities and Investments Commission on Thursday reveal Immediation has now appointed Joanne Emily Dunn and David Peter McGrath of FTI Consulting as administrators.

Dunn said the administration process is still in its early days, but cashflow issues and the depletion of available capital appear to have contributed to its administration.

“The reasons for that we don’t know yet,” Dunn told SmartCompany on Friday.

“And that will be part of our investigations over the course of the next four weeks.”

The administrators will today decide if they are able to maintain Immediation’s operations through the administration, Dunn continued.

“We’re just talking to a few parties at the moment to see if there is an opportunity to keep something operating,” she said.

“If there is no funding someone is prepared to provide to keep the to keep the lights on to keep the doors open, we will have no no option but to cease operation.”

Given the very early stage of the administration, it is too early to say what will happen to the approximately eight staff roles and four contractor positions at Immediation.

It is also too early for the administrators to provide guidance for Immediation’s users, Dunn added, while confirming they will contact each customer in the week ahead.

“Our role is to do what’s in the best interest of creditors, with the resourcing that we’ve got available,” she added.

“If that does mean we need to cease operations, we will still be looking at securing the assets of the company, which, ultimately is its intellectual property.”

A date for the first meeting of creditors has yet to be set.

SmartCompany has contacted Immediation for comment.

Mediation on offer by small business commissioners

Immediation is not the only service to provide mediation services to small businesses without the resources to chase commercial disputes through the courts.

Mediation support is available through state and territory small business commissioners, which can resolve or divert disputes before they escalate.

Reflecting the challenging business environment for many small traders, the Office of the NSW Small Business Commission cut the cost of its dispute mediation services to $330 for four hours, down from $608 for mediation processes of the same duration.

Businesses seeking support with their own commercial dispute can contact their local small business commissioner, or reach out to the Australian Small Business and Family Enterprise Ombudsman for further guidance.