GOVERNMENT ANNOUNCES THAT ATE PREMIUMS WILL STILL BE RECOVERABLE IN INSOLVENCY CASES UNTIL AT LEAST APRIL 2015
The majority of the cost reforms detailed within the Legal Aid, Sentencing and Punishment of Offenders (‘LASPO’) Bill are to come into force in April 2013. However, Justice Minister Jonathan Djanogly has recently announced that contentious insolvency work has been granted a delay on implementation, until at least April 2015.
As with many other areas of law, there has been an ongoing debate as to whether the abolition of recoverability of CFA success fees and After the Event (‘ATE’) insurance premiums should be applied to insolvency litigation, with one of the primary reasons being the benefits that these risk-sharing tools can often bring to the government and, in turn, the taxpayer. After all, many insolvency disputes would never be pursued if it weren’t for the availability of alternative funding structures.
INSOLVENCY CASES ENCOURAGE “GOOD BUSINESS PRACTICE”
It does seem that this has now been recognised by Mr Djanogly:
Insolvency cases bring substantial revenue to the taxpayer, as well as other creditors, and encourage good business practice which can be seen as an important part of the growth agenda with wider benefits for the economy.
For specialist insolvency firms who rely on CFA income and the availability of ATE insurance to enable them to pursue claims, this is good news as they will be able to continue funding cases in that way. This latest announcement means that Insolvency Practitioners can watch the “post-Jackson” world from a distance and be well prepared for the new landscape when that time comes.
For information about ATE insurance and litigation funding in insolvency disputes, including details of our exclusive insolvency product “INSOLV3NCY”, please contact one of our specialist brokers by telephone on 0845 257 6058.