- The Ministry of Justice announced last Thursday that the insolvency exemption to the Jackson Reforms has been indefinitely extended. This means that office-holders are able to continue to operate on conditional fee arrangements, recovering success fees from the losing party and with after the event insurance premiums remaining recoverable from the losing party. See our client alert for further details.
- The Small Business Enterprise and Employment Bill is currently before the House of Lords. Sections of the Bill are proposed to be introduced as amendments to the Insolvency Act 1986. These include: (i) the right to take action against individuals for fraudulent trading and wrongful trading being extended to administrators (currently these actions can only be taken by liquidators), (ii) the ability for office-holders to assign to third parties certain causes of action including actions for fraudulent trading, wrongful trading, transactions at an undervalue and preferences, (iii) changes to the manner in which office-holders communicate with creditors for example by removing the requirement for physical meetings, (iv) the ability for creditors to elect not to receive communications from the office-holder in certain circumstances, and (v) provision for the Secretary of State expressly to allow, prohibit or impose conditions on the sale of assets by an administrator to connected persons. In addition there is a range of provisions that seek to strengthen the framework within which the office-holders’ regulators can act. We will follow the progress of this Bill with interest and report further in due course. The changes, in particular as relates to the assignment of claims, are potentially wide ranging in perhaps unexpected ways and will certainly increase the practical necessity for directors of financially distressed companies to take detailed legal advice with regards to their duties.
- The consultation period on proposals to consolidate and replace the Insolvency Rules 1986 came to an end in 2014. The Insolvency Service has now embarked upon a series of meetings with stakeholders to participate in discussions regarding the various parts of the new rules. Emma Flacks from the London CR&B team will be attending some of the meetings with interest.
