The Parliamentary Under-Secretary of State for Justice, Minister for the Courts and Legal Aid (Mr Shailesh Vara) has today released a statement from the Ministry of Justice, confirming that the Legal Aid, Sentencing and Punishment of Offenders Act (“LASPO”) insolvency exemption, will not be abolished on 1 April 2015.
The Minister of State for Civil Justice and Legal Policy (Lord Faulks QC) announced in a Ministerial Statement today “no win no fee agreements in insolvency proceedings will continue for the time being to operate on a pre-LASPO Act basis with any conditional fee agreement success fees and after the event insurance premiums remaining recoverable from the losing party”.
Today’s statements therefore confirm that the controversial sections 44 and 46 of LASPO in relation to insolvency proceedings will not come into force on 1 April 2015 in respect of insolvency claims as originally planned. The Lord Chancellor shall not therefore be issuing an Order to limit the recoverability of success fees for Conditional Fee Agreements (“CFA”) and After the Event Insurance (“ATE”) premiums pursuant to sections 44(2) and 46(1).
This represents a resounding success for creditors of insolvent companies and bankrupts and puts a further delay on what can only be seen as a ‘rogue director’s charter’. Our thanks go out to all who have lobbied for a further delay and/or outright exemption. CFAs coupled with ATE have been the tool used by insolvency practitioners in order to pursue rogue directors as well as recipients of antecedent transactions.
It should however be noted that Lord Faulks QC’s statement further provides that the Ministry of Justice “will consider the appropriate way forward for insolvency proceedings and will set out further details later in the year.” We are still therefore working with office holders to put in place funding for claims or potential claims going forward as well as planning for post Jackson litigation funding.
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