The Government has announced that the insolvency litigation exemption will come to an end next year.
At present, proceedings brought by liquidators, administrators and trustees in bankruptcy to recover assets of the insolvent estate are excluded from the effect of sections 44 and 46 of the Legal Aid Sentencing and Punishment of Offenders Act 2012 which removed the recoverability of success fees in conditional fee agreements and after the event insurance premiums.
The insolvency litigation exemption will come to an end by April 2016. This is disappointing news for the insolvency profession who have been campaigning for the exemption to remain in place. It is estimated that conditional fee agreements are currently used to pursue insolvency litigation with a total value in excess of £1 billion each year.
Following yesterday’s announcement, insolvency practitioners would be well advised to carry out a review of their files and identify any potential claims to ensure that claims can be issued, if appropriate, before the current exemption ends at the end of March.
If you need any assistance reviewing claims or have any potential claims you would like to pursue on a no win no fee basis, please contact Rachel Brown within Druces LLP’s Commercial Litigation Team. Rachel has acted for a number of liquidators and trustees in bankruptcy on a no win no fee basis in the past.