LASPO Insolvency Exemption

No-win No-fee Agreements for Insolvency Proceedings

In February this year the Government extended the little advertised exemption to allow Insolvency claims to benefit from being able to claim CFA uplifts and ATE premiums in successful litigation but why is it always reported to enable the insolvency practitioner to pursue ‘rogue Directors’.

The extension is indeed necessary and it is acknowledged that rogue Directors can cause untold harm to businesses and creditors but we always omit ‘other’ wrongdoers who could be pursued through litigation for recovery to creditors and members.

The current wave of bank wrongdoings shines the spot light on the very Debenture holder, often Appointer of the IP, and of their actions through ‘misselling’ or a De Facto Director – are they the reason or indeed the main contributor for the businesses financial difficulties ?

LASPO allows the office holders to consider a no risk no cost option for recovery of money through a suitable Law Firm.

As we observe the banks behaviour in its own FCA interest rate hedging product (irhp) review scheme we stand and watch as the wrongdoer details the suitable level of redress and in some cases prefers themselves as creditors ahead of all other unsecured creditors by way of applying ‘insolvency law’ and ‘set off’.

Last week we had an admission from a bank appointed IP that it would not litigate the bank who appointed it so are seeking to sort their resignation and a new non-conflicted practitioner replace them.

In meetings we chaired at the FCA in ’13 and ’14 we were assured that there was no conflict of interest in insolvent reviews between the banks and bank panel IP’s, but there clearly is.

Can we afford to let the banks prove insolvency to be a safe haven for wrongdoings by watching them detail ‘redress’ to be ‘set off’ – is this the best outcome for creditors and members ?

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