Insolvency for dispute resolution lawyers

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