The Insolvency Express trials pilot ends 1 April 2018—use it or lose it

Frances Coulson, senior partner at Moon Beever, reminds us that the Insolvency Express Trials  (IET) pilot is an excellent innovative scheme currently being run by the Insolvency Court in London in an attempt to reduce the time taken to get to a hearing and minimise costs of an action, for the benefit of all parties.

What is the IET pilot?

The IET pilot is an excellent scheme and innovation by the Insolvency Court in London to attempt to reduce the time taken to get to a hearing as well as minimise costs of an action, both of which benefit parties (and creditors).

The IET pilot ends in April 2018 and we are urged to use it or face losing it.

If a case is likely to take two days or less at hearing/trial before an Insolvency and Companies Court Judge (previously called Bankruptcy Registrar), and adverse costs recovery is limited to £75,000 (including any conditional fee arrangement uplift and disbursements but excluding VAT and court fees) the applicant can mark the claim for an IET upon issue.

Practice direction 51P (under r 51.2 (b)) sets out the IET in the Bankruptcy and Companies Courts of the Chancery Division of the High Court (now Business and Property Court).

The other limitation is that the matter must be commenced by application notice and require limited directions rather than full case management and need only limited disclosure.

What type of case does the IET suit?

It is ideally suited to many fairly simple claims where, in effect, the application is accompanied by the applicant’s evidence (as it must be to qualify for the pilot) and all that in reality is needed is evidence in reply (then possibly answer), and a trial with deponents attending.

The application, which cannot exceed 15 pages, must state the relief sought, give a description of the nature of the dispute, a summary of the issues likely to arise in the application, the applicant’s contentions, including material facts upon which the applicant intends to rely (which must be stated with adequate particularity); and the legal grounds for the relief sought. It must exhibit relevant documents (hence limited disclosure likely to be limited to anything the Respondent wants to produce).

On issue, a directions hearing will be allocated no more than 45 days (just over six weeks) from date of issue with a time estimate of 30 minutes.

The Respondent can object to the use of the procedure (which objections will be dealt with at the directions hearing) but then must file and serve brief reasons for such objection no later than 14 working days before the directions hearing. The Applicant may file and serve any reply to the Respondent’s objection no later than seven working days before the directions hearing. These must also be brief. Just two sides of A4 12pt font 1.5 spacing.

At the directions hearing the Insolvency and Companies Court Judge will give binding directions and fix the final hearing, between three and six months from the date of the directions hearing, with an agreed time estimate, and it won’t very easily be vacated.

Aside general insolvency claims, the IET is ideally suited for Insolvency Act 1986 ss 236 or 366 applications, where often inertia by the Respondent, or some fear of a data breach in complying with those sections, is the only reason for failing to provide information. It can thus cut short the period taken in naturally sequential investigations in fraud/misfeasance cases, enabling a speedier resolution.

When does the IET pilot end?

As stated in the practice direction itself, the IET pilot is set to end on 1 April 2018 and so far take-up has been limited.

The matter will rest with the Civil Procedure Rules Committee as I understand it, as to whether to extend the Scheme. I commend its use. Several County Courts have emulated it with their own schemes I understand, and it would be a shame if, having lead the way, the London Insolvency Court loses its own innovation through lack of publicity/use.

Further reading:

If you are a LexisPSL subscriber, click the links below for further information on this topic:

The Pilot Scheme for Insolvency Express Trials (Subscriber access only)

Insolvency Express Trials Pilot Scheme  - an interview with former Chief Registrar Stephen Baister (Subscriber access only)

Not a subscriber? Find out more about how LexisPSL can help you and click here for a free trial of LexisPSL Restructuring and Insolvency.

First published on LexisPSL Restructuring and Insolvency

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor

Relevant Articles
Area of Interest