Ministerial Announcement Provides More Time For Insolvency Industry To Adapt

National law firm Irwin Mitchell has today welcomed the Government’s announcement today that the temporary exemption allowing no win no fee agreements for insolvency proceedings will no longer end in April 2015.

Originally the exemption from the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012, was due to end at the end of April 2015, but in a written ministerial statement to Parliament today, Lord Faulks QC has provided insolvency professionals with more time to adapt to changes to civil litigation funding.

As a result no win no fee agreements in insolvency proceedings will for the time continue to operate on a pre-LASPO Act basis. This means that the success fee and ATE insurance premium will remain recoverable from the losing party.

The Ministry of Justice has said that it will set out further details later in the year.

Last year Irwin Mitchell launched a bespoke funding solution which includes a Conditional Fee Agreement and After The Event (ATE) insurance to support insolvency practitioners (IPs) to manage the costs and risks associated with insolvency litigation.
 
The innovative solution, which is called Support4Dispute, has been developed together with leading ATE insurer Allianz Legal Protection, part of Allianz Insurance plc, and will enable insolvency practitioners to pursue litigation following an Administration, liquidation or bankruptcy more easily.

Expert Opinion

This announcement is welcome news for insolvency professionals and we look forward to further details in the near future. What it does mean is that combined with our Support4Dispute product, IPs will be able to recover more assets for the benefit of creditors with no financial risk and uncertainty.” John Vickery - Partner