Insolvency Profession Disappointed Over Loss of 'No Win No Fee'
Posted on 20 January 2016
Insolvency Practitioners and R3 have expressed disappointment with the government's decision to end the exemption for insolvency litigation from the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
The Insolvency exemption from LASPO Act allowed for certain costs to be reclaimed from losing defendants in insolvency litigation.
The reason that the exemption was so important to Insolvency Practitioners is that it enabled them to take legal action for recoveries that would be beneficial to creditors when they may not otherwise have funds with which to take action for recovery.
Philip Sykes, president of R3, said, "We are deeply disappointed by the Ministry of Justice's decision. It's a decision that flies in the face of all available evidence. The government is potentially writing off hundreds of millions of pounds per year owed to not just the HMRC, but to hundred, if not thousands, of ordinary honest businesses as well."
"The Only winners today are the rogue traders and others who refuse to repay money owed to creditors after an insolvency. We're back to an uneven playing field, where rogue directors hold all the cards - and cash."
For further information please contact our Insolvency Practioner in Bristol.
It is important to take early advice - whilst all options are still open. The longer matters are left, the less control you will have over the outcome, and the harder it becomes to save a business
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