This Practice Note is intended to highlight a range of issues which arise in Personal injury claims where either the claimant or defendant becomes insolvent.

It is important first to distinguish between two distinct but related concepts.

A company is insolvent where either it is unable to pay its debts as they fall due or where the value of the company’s assets is less than the amount of its Liabilities. Although less explicit in the Insolvency Act 1986 (IA 1986), the same criteria would also determine whether or not an individual is insolvent.

The concept of insolvency is to be distinguished from the factual question of whether or not either an individual or a company is in an insolvency process. In the case of a company, the principal processes are liquidation and administration. In the case of an individual, the principal process is bankruptcy.

The impacts of a party to a personal injury claim entering into an insolvency process are often profound and the bulk of this Practice Note focuses