TheJudge & Burford hosted a successful breakfast briefing at The Waldorf Hilton on 27th January, which saw some of the leading insolvency lawyers and IP’s get together to discuss the removal of insolvency’s carve out from LASPO, and the impact this will have on the availability of ATE insurance and funding. Lexa Hilliard QC also gave her insights into the impact of these changes on insolvency litigation.
The morning started out with the opportunity for attendees to chat over coffee before everyone tucked into a full English breakfast. Nick Rowles-Davies of Burford opened the discussions by talking about Sprint, a new funding facility for low value cases which has been designed in exclusive collaboration with TheJudge. Nick explained that Sprint is a product of feedback received by Burford and TheJudge from lawyer’s frustrations that funding is not readily available for low value cases, and that the due diligence process is too long. Sprint aims to combat this by providing immediate funding for cases whereby TheJudge can secure ATE insurance for the funders’ capital and adverse costs. The cost is fixed, regardless of the case, and is very competitive. Many insolvency lawyers were particularly interested in this product as it works well for insolvency proceedings which generally move more quickly than usual civil litigation.
Matthew Amey of TheJudge spoke about the future of ATE insurance in insolvency litigation. He predicts that there is likely to be a surge in applications and recommended that lawyers should arrange a streamlined facility in order to guarantee they can obtain insurance with a recoverable premium. Matthew also suspects that there will be many cases that are no longer economic for IP’s to run if premiums are no longer recoverable, but that insurers are likely to be more flexible in terms of premium structures. For example, some insurers may offer damages based premiums, so that the premium is a fixed percentage of the actual recovered damages. This would give IP’s more certainty that they would retain the lion’s share of the proceeds.
Lexa Hilliard QC spoke about some of the insolvency litigation that she has been involved in, and stressed that lawyers should do everything they can to assist R3 in their lobbying against removing the carve out for insolvency litigation. However, Lexa Hilliard QC said that lawyers should also follow the advise of Buford and TheJudge and secure ATE insurance before 31st March 2015 on any cases requiring cover. She said that if the carve out is lifted, we will go back to the cost regime of before 1999, when lawyers and IP’s complained that the rules were unfair and prevented access to justice against dishonest or fraudulent directors.
The feedback from the seminar was overall extremely positive, with all the attendees commenting on how useful it was to hear the views from those in the industry as to the likely effects of these changes. If you missed it, there is a second breakfast briefing with Burford, TheJudge and Lexa Hilliard QC at The Whaldorf Hilton on February 17th 2015. To enquire about reserving a place please contact firstname.lastname@example.org.