Jackson reforms and insolvency proceedings

Jackson reforms and insolvency proceedings

Taken from Corporate Rescue & Insolvency Journal :

Corporate Rescue and Insolvency
(2013) 3 CRI 117
1 June 2013
KEY POINTS

●     From 1 April 2013 amendments were applied to the CPR which affects all court proceedings.

●     The overriding objective has been amended to ensure that cases are dealt with “justly and at a proportionate cost”.

●     Insolvency proceedings are exempted from the abolition of success fees and the ability to recover insurance premiums until April 2015.

The Background

On 1 April 2013 significant amendments to the Civil Procedure Rules 1998 were implemented, following a radical review by Jackson LJ.

The main change is that the overriding objective has been amended to ensure that cases are dealt with justly and at a proportionate cost. Other amendments which flow from this include tailored disclosure requirements, limiting information contained in factual evidence, increasing costs for defendants who do not accept a reasonable Pt 36 offer, and the use of concurrent expert evidence. The ability to recover a success fee and after the event insurance (ATE) will generally be removed under the reforms. However, damages based agreements, which previously were only permitted in limited matters, are now allowed in all civil proceedings, including insolvency.

The good news:

Insolvency proceedings are exempted from the abolition of success fees and the ability to recover insurance premiums until April 2015.

The not so good news:

Insolvency proceedings will be subject to the majority of the changes, in particular relating to the proportionality of costs in proceedings. Unfortunately when one drills down to look at how this will apply in practice, it is clear that amendments suitable for general civil cases do not necessarily fit into insolvency proceedings.

CASE AND COSTS MANAGEMENT

CPR Pt 3 is amended by adding Section II (Costs management) and Section III (costs capping) to all multi track cases. To bring proportionality into the issue of costs, Jackson has provided a structure which parties need to adhere to, consisting of four essential elements:

●     Parties must prepare and exchange litigation budgets, to be updated as the case progresses.

●     The court will consider the budgets at each stage of the process and either approve these or suggest changes.

●     The court is to manage the case to ensure it proceeds within the approved budget so far as possible.

●     The costs recoverable by the winning party will be assessed in accordance with the approved budget.

Parties (other than litigants in person) will be required to file and exchange costs budgets in accordance with Prec

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About the author:
Eleanor qualified in 1998 into the insolvency team at ASB law. She became a partner in 2005, and went on to head up the Recovery & Insolvency team. Whilst traditionally specialising mainly in contentious corporate insolvency matters, in recent years she has moved into the non contentious arena, in particular specialising in company administrations.