Insolvency litigation and the impact of the Jackson reforms
R3, working with ACCA, ICAEW, ICAS, IPA, Moon Beever, JLT Specialty Ltd. and Moore Stephens, has commissioned Dr Peter Walton of the University of Wolverhampton to conduct independent research into the likely impact on insolvency litigation of the Jackson Reforms (brought in by Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012).
The Jackson Reforms, amongst other things, prevented successful claimants claiming a Conditional Fee Agreement (“CFA”) success fee uplift and any premium for After-The-Event (“ATE”) insurance from a losing defendant. These are often used in insolvency litigation for pursuing directors or third parties for money that rightly belongs to creditors.
After a great deal of lobbying by R3, the Government granted a two-year delay in the implementation of the Jackson Reforms for insolvency litigation. This temporary exemption runs until April 2015.
In order to demonstrate the likely impact of these changes, the research will quantify, as far as possible, realisations brought into insolvent estates by the use of CFAs and ATE insurance. The research will also aim to demonstrate the value of this work in terms of removing funds from fraudulent directors and increasing returns to creditors, which includes HMRC.
R3 need help in demonstrating the value of this work and Insolvency Practitioners have been asked to complete the attached survey, which, breaking with a recent R3 tradition is in the form of either a word document, or an interactive PDF, rather than an on-line form (which they hope will make it easier to complete). The survey asks for information in relation to insolvency litigation commenced during 2009, 2010 and 2011.
Part A of the survey asks general questions about the use of CFAs and ATE insurance in insolvency litigation or threatened litigation and Part B asks for specific information about creditor returns in individual cases where a CFA has been used. Part B is in the form of a table to be completed for each specific case. R3 request that you complete the table for at least three specific cases and, if you are able, to complete as many as possible.
All information and data received will be treated in the strictest confidence and in accordance with the research provisions of the Data Protection Act 1998. R3 will not have access to the data provided. All findings will be completely anonymised. No respondent will be identified unless he or she specifically requests attribution. If, despite these assurances, you are unable to identify individual insolvent estates please list your cases with separate Project Names e.g. Case A, Case B and Case C.
When completed your responses should be emailed to R3researchproject@wlv.ac.uk or posted to Dr Peter Walton, Law School, University of Wolverhampton WV1 1LY.
Should you respond please state whether you would be prepared to be contacted by Dr Walton in relation to your answers or the Jackson Reforms generally.