R3 and other trade bodies continue to lobby Parliament for an extension to the exemption to the funding restrictions imposed by the Legal Aid Sentencing & Punishment of Offenders Act (LASPO).
However, as it stands the deadline for insolvency practitioners to enter into conditional fee agreements (CFAs) and after the event (ATE) insurance policies and still be able to recover the success fee and premium from the losing party is 31 March 2015. Given the insolvency world is now on countdown to Christmas and it will be 2015 before we know it, March 2015 is not too far away!
What are the implications?
In effect, if the legislation comes into force as drafted, CFA success fees and ATE insurance premiums will, from 1 April 2015, have to be paid by creditors rather than be recovered from the other side. This will mean that overnight many cases will be more difficult to insure and/or become uneconomical or uncommercial to pursue.
Our litigation team has already witnessed and responded to the significant changes in litigation funding following the Jackson Reforms in 2013 in relation to non-insolvency cases. What is clear from 2013 is that preparation and early assessment of all possible claims is vital.
In 2013, many claims failed to obtain insurance in the mad dash prior to the deadline due to the ATE market being unable to cope with the demand. In order to avoid disappointment and, worse, criticism from creditors or other stakeholders for failing to act in time, we suggest that you review any possible claims now. If you think there are cases where you may bring a claim in the future, let us know. We have links with a number of leading ATE insurers and practical experience of how to get appropriate cover in place.
How can DWF help?
DWF already has an impressive track record of thinking creatively and working with clients to use funding products and share risk in order to enable claims to be pursued that would otherwise be stifled due to funding problems.
The impact of not having appropriate funding solutions in place by 31 March 2015 will be significant. With this in mind, register your interest here if you would welcome an opportunity to come to a roundtable event in February to discuss the issues in more detail and meet with a member of our team to understand more about the options available.
What should I be doing now?
To avoid missing the opportunity, review your case load early and speak to one of our team to discuss the options available to ensure that the relevant documentation and cover can be in place prior to 31 March 2015.
If you have any questions or would like to discuss the implications in further detail, please do not hesitate to get in touch at: firstname.lastname@example.orgThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.