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It is a particular feature of English insolvency law when contrasted with the insolvency laws of almost all continental systems that so much can take place in the insolvency of a company without the involvement of the court. This is possible of course because we have both the official receiver and the qualified insolvency practitioner (IP), the latter regulated by his professional body. Against this general background it is unsurprising that there is little in the SBEEA 2015 which impacts directly on the courts.
The prime exception is the new power, with as yet no date for implementation, of an administrator or liquidator to assign a right of action vested in him as office-holder. For the litigator and the courts it will be intriguing to see the extent to which this power is used. Given the importance in the insolvency landscape of administration, the extension of claims for fraudulent and wrongful trading to administrations is significant in this connection. Office-holders have been understandably reluctant to pursue such claims themselves, and for so long as the proceeds of any successful claim formed part of the company’s assets there was little incentive for creditors, however incensed with the manner in which the company’s pre-insolvency affairs had been administered, to fund the bringing of office-holder claims. This is now changed. A third party may take an assignment and keep the proceeds, subject to the agreement he makes with the office-holder. In the majority of cases there will be sufficient uncertainty in the success of any particular claim to justify an assignment at a relatively low premium making it a sufficiently attractive proposition to encourage the use of these provisions.
If the market in office-holder claims assignment does indeed take off, the focus will turn to the ability of the courts to handle the additional work with reasonable expedition. Waiting times both for interim and final hearings are at present not what most courts would wish. It is plain that whoever wins the forthcoming election there will be considerably increased pressure on HMCTS budgets, so the outlook for improvement in a generally unsatisfactory situation is not exactly bright. Litigants can rely on the Chancellor
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Neeta has been working as a paralegal in Banking and Insolvency for the past 4 and a half years.
She started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her experience.
Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice Course. She moved to Lexis®PSL in April 2013.
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