On 26 February 2015, the Ministry of Justice announced a temporary extension to the commencement of sections 44 and 46 of the LASPO Act 2012 for insolvency proceedings. The statement released states that further details will be set out later in the year.
In the interim, the insolvency profession have been given a temporary reprieve from the impending restrictions on recoverability of success fees and ATE insurance premiums and the lobbying of R3 and other bodies has seemingly paid off, in the short term at least. This is good news for creditors and stakeholders within the insolvency world and protects the ability of an office holder to pursue litigation with the benefit of CFA/ATE recoverability, to recover assets for the benefit of the estate.
Whilst the exemption has been extended, this issue is not yet fully resolved and we would urge insolvency practitioners to consider whether they have cases in which claims may be brought and to take advantage of the exemption while they can.
Eyes will also no doubt turn to the election and what stance the newly elected Government may take towards the exemption, as well as to the pending decision of the Supreme Court in the case of Coventry v Lawrence which is addressing the question of the compatibility of CFA/ATE recoverability with the European Convention on Human Rights.
This 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.