More than 1,000 former employees of the Manchester-based Accident Group have signed up to a joint action seeking compensation.
The workers want compensation for losing their jobs
It is thought it could become one of the largest ever workforce group legal actions.
Many of the workers were informed the company had collapsed by text message.
A large number did not receive their wages when the firm went under in May.
A creditors' meeting held last week heard staff are unlikely to receive any money from sales of The Accident Group's assets.
'No darned good'
The company owes about £100m to its various creditors.
Brian Slater, the solicitor acting on behalf of the workers, said the firm had broken the law by not consulting workers over the job losses.
He said: "The government rule says workers should be entitled to a 90-day consultation period if there is going to be a redundancy of this size.
"But, of course, that's no darned good if they send a text message at the end of the company's life to all of the people and they're left with no consultation at all.
"I'm going to a tribunal for an awful lot of people to say to them we want a protective reward in order to support them and give them some money following this company going into administration."