- The new debt respite scheme—the court’s view (Axnoller Events v Brake)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: In one of the first cases since implementation of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, SI 2020/1311, His Honour Judge Paul Matthews considered the impact of the regulations on judgment debts and costs orders made during the lifetime of either a breathing space moratorium or a mental health crisis moratorium, concluding that: i) debts arising from court orders (including interim costs orders and orders for payments on account of costs) are qualifying debts for the purpose of the regulations; ii) that costs payable under a costs order made after the moratorium had commenced were qualifying debts under the regulations and could become moratorium debts by virtue of reg 15, but are not automatically such; iii) that an order that one party meet the other party’s costs creates only a contingent liability of an uncertain amount and therefore was not a qualifying debt until such time as the court orders payment of a specific sum of money; iv) that a moratorium under the regulations for one co-party protected enforcement against each and every other co-party, and v) that the existence of a moratorium under the regulations did not constitute ‘good reason’ to depart from the provisions of CPR 44.2(8) and not order a payment on account of costs. Written by Anusheh Burcher, senior associate (commercial litigation) and Katie Farmer, legal director (insolvency), at Ashfords LLP.
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