The Minister of State for Civil Justice has announced that the LASPO exemption of insolvency litigation will come to an end on 1 April 2016.
This means that office holders will be subject to the wider rules relating to recoverability of costs in no win no fee cases and for ATE premiums. Uplifts and premiums will no longer be recoverable from the defendant. This will significantly change the cost / benefit analysis of many cases – and it is expected that many cases (especially smaller cases) will no longer be viable with the result that dodgy directors will get away with a great deal more than they have under the current regime.
There are other ways to pursue unfunded cases – such as litigation funding and assigning claims. However, top of the list in the New Year will be to review all your cases to assess merits of issuing a claim before 1 April 2016. Despite the upbeat messages from some ATE providers, there is bound to be a rush to get ATE cover and so the reviews, asset searches and decisions must start now.
If you need any help in your review process please contact Ed Starling, Tal Goldsmith or your usual Wedlake Bell adviser.