At 4(c) of the Saving Provision under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 5 and Saving Provision) Order 2013, it states that article 2(1)(a) and (c) and article 3(a) and (c) do not apply to:
“proceedings in England and Wales brought by a person acting in the capacity of:-
(i) a liquidator of a company which is being wound up in England and Wales or Scotland under Parts IV or V of the 1986 Act; or
(ii) a trustee of a bankrupt’s estate under Part IX of the 1986 Act;”
Whilst there is perhaps still some abiguity over whether this refers solely to claimants in insolvency disputes, or whether it extends to defendants also, it is safe to say that ATE insurance premium recoverability is set to remain for at least the majority of insolvency cases.
Needless to say, Insolvency Practitioners (‘IPs’) and specialist insolvency litigation lawyers are bound to be being bombarded by special offers from the litigation insurance and funding industry, with underwriters wishing to take advantage of the continuing recoverable regime. Ultimately, IPs still have a duty to the creditors to maximise recoveries from the litigation and we would argue that, now more than ever, a full market search of the available ATE insurance and litigation funding options is prudent.
The LASPO Act has of course had an impact on the future structure and pricing of litigation insurance offers, for the majority of areas of law. Whilst this shouldn’t have an effect on premium pricing for insolvency litigation, will underwriters be looking to increase recoverable ATE premiums to take into account the inevitable decrease in premiums the increased price competition in other areas of law will force?
Only time will tell but our strong advice would remain to search the litigation insurance market for numerous offers, even where TheJudge is not instructed, to ensure that the IP client (and indeed the creditors) and getting true value for money.
To speak to one of our brokers about the future of the litigation funding and insurance market for insolvency litigation, or to organise a CPD accredited training session for your insolvency litigation team, don’t hesitate to contact us.