Insolvency for dispute resolution lawyers

Copyright © 2026 LexisNexis

The content in this subtopic is intended to assist a dispute resolution lawyer navigate the issues and wider strategic considerations which might arise in the context of disputes involving financially distressed and/or insolvent parties.

Impact of insolvency on litigation

It is important to observe at the outset that there is no general prohibition on issuing or pursuing any claims (whether original claims, additional claims or counterclaims) against ‘insolvent’ parties. Insolvency is a question of fact and individuals and companies may shift from solvency to insolvency at various times without any legal consequences as regards parties who may wish to bring claims against them. However, when a company or an individual enters into a formal insolvency process or debt management regime, restrictions may be imposed on the ability of other parties to bring, or continue with, claims against that company or individual.

For general guidance concerning the impact of insolvency processes on litigation, see: Claims against insolvent companies and individuals—overview, as well as Practice Notes:

  1. •

    What effect does an insolvency process have on ongoing litigation and arbitration proceedings?

  2. •

    Comparison

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in TAKE A FREE TRIAL
Powered by Lexis+®
Latest Dispute Resolution News

UK Supreme Court announces fee increases effective 1 April 2026

The UK Supreme Court has announced that its fees will increase from 1 April 2026 following recommendations from the Lord Chancellor. The increases reflect Consumer Prices Index inflation of 5.9% measured between March 2023 and March 2025, with the permission to appeal fee rising to £1,470 and the notice of appeal filing fee increasing to £9,500. These adjustments represent the second increase since 2011, following a 2024 decision to implement biennial fee reviews to account for inflation. Parties that have already filed permission to appeal applications will be subject to the new fees for any subsequent stages of their appeal proceedings. The Lord Chancellor sets Supreme Court fees under powers conferred by the Constitutional Reform Act 2005.

Third party costs—Court of Appeal confirms stay pending detailed assessment is case management decision (Federal Republic of Nigeria v VR Global Partners LP)

Dispute Resolution analysis: The Court of Appeal has upheld the decision of a judge at first instance to stay an application for a third-party costs order under section 51 of the Senior Courts Act 1981 until after the conclusion of the detailed assessment of the underlying bill of costs. Dismissing Nigeria’s appeal, the Court of Appeal held that there is no presumption that a third-party costs application should be determined before a detailed assessment. The question is purely one of case management, to be decided in accordance with the interests of justice and the overriding objective. The decision, being within the scope of discretion allowed a judge, was not amenable to appeal; that a different judge would have reached a different conclusion was not in point. Where there is a real question whether any further sum will be payable following assessment (particularly where a substantial payment on account has already been made and costs are to be assessed on the standard basis), it is legitimate to stay the third party application to avoid wasting court resources on what may prove to be a pointless satellite exercise. Of general and at least equal significance to costs practitioners were the Court of Appeal’s strong comments (obiter dicta in strict terms) deprecating disproportionate detailed assessment processes and endorsing the use of sampling as a case management tool in cases involving very significant bills of legal costs. Written by Lauren Godfrey, barrister at Gatehouse Chambers.

UKJT Report on Control of Digital Assets

The report, prepared by the UK Jurisdiction Taskforce's Control Panel and published on 19 March 2026, provides technical, non-binding guidance for courts and legal practitioners on how digital assets are controlled in practice. The Panel was established at the invitation of the Lord Chancellor, following the Law Commission’s recognition that digital assets constitute a distinct ‘third category’ of property. The report emphasises that ‘control’ is a factual, functional concept, centred on the ability to exclude others, use and transfer an asset. It analyses various forms of control, including direct, multi-party, smart contract-based, delegated, and layered control, highlighting that real-world arrangements are often complex and overlapping. The report notes that the absence of a central operator and privacy-enhancing technologies may limit the effectiveness of traditional legal remedies. Overall, it points to a need for the law to develop incrementally in response to evolving technologies, with the courts adopting a flexible, context-specific approach focused on how control is in fact exercised in any given system.

Professional negligence and limitation—the roll of impecuniosity in constructive knowledge (Kay v Martineau Johnson)

Dispute Resolution analysis: The Court of Appeal considered the correct approaches to actual knowledge and constructive knowledge in the context of solicitors’ professional negligence. Of note was the consideration of whether impecuniosity was a relevant factor in considering reasonable steps and the taking of expert advice for the purposes of the date of knowledge. Written by James Davies, barrister and Mediator at New Square Chambers.

View Dispute Resolution by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

Misrepresentation—damages as a remedy

Misrepresentation—damages as a remedyThis Practice Note considers when damages are available as a remedy for a misrepresentation claim with reference to the Misrepresentation Act 1967 (MA 1967).For consideration of when the courts will rescind a contract for misrepresentation and when parties can

Negligence—when is the duty of care breached?

Negligence—when is the duty of care breached?Having established that a duty of care exists (see Practice Note: Negligence—when does a duty of care arise?), it is then necessary to consider whether or not there has been a breach of that duty. This will depend on a number of factors outlined below and

Negligence—key elements to establish a negligence claim

Negligence—key elements to establish a negligence claimThis Practice Note outlines the key elements for establishing a claim in negligence. For specific guidance on negligence in the context of company/parent company liability, banks and in professional negligence cases, see:•Practice Note: Tortious

Claims against directors—key considerations for dispute resolution practitioners

Claims against directors—key considerations for dispute resolution practitionersThis Practice Note outlines some of the key considerations when dealing with claims concerning company directors. It addresses the definition of a director, the likely claimant(s) in actions involving directors as well
Misrepresentation—damages as a remedy

Misrepresentation—damages as a remedy

Misrepresentation—damages as a remedyThis Practice Note considers when damages are available as a remedy for a misrepresentation claim with reference to the Misrepresentation Act 1967 (MA 1967).For consideration of when the courts will rescind a contract for misrepresentation and when parties can

Negligence—when is the duty of care breached?

Negligence—when is the duty of care breached?

Negligence—when is the duty of care breached?Having established that a duty of care exists (see Practice Note: Negligence—when does a duty of care arise?), it is then necessary to consider whether or not there has been a breach of that duty. This will depend on a number of factors outlined below and

Negligence—key elements to establish a negligence claim

Negligence—key elements to establish a negligence claim

Negligence—key elements to establish a negligence claimThis Practice Note outlines the key elements for establishing a claim in negligence. For specific guidance on negligence in the context of company/parent company liability, banks and in professional negligence cases, see:•Practice Note: Tortious

Claims against directors—key considerations for dispute resolution practitioners

Claims against directors—key considerations for dispute resolution practitioners

Claims against directors—key considerations for dispute resolution practitionersThis Practice Note outlines some of the key considerations when dealing with claims concerning company directors. It addresses the definition of a director, the likely claimant(s) in actions involving directors as well