In a written ministerial statement to Parliament yesterday, 24 May, the government has announced that CFA success fees and ATE insurance premiums will continue to be recoverable in insolvency proceedings until April 2015. Recoverability in all other types of case is to be abolished from April 2013 on implementation of the relevant provisions of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (see post), subject to further exceptions for mesothelioma claims (pending a review) and insurance premiums for expert reports in clinical negligence cases.
The statement said: “Insolvency cases bring substantial revenue to the taxpayer, as well as other creditors, and encourage good business practice which can be seen as an important part of the growth agenda with wider benefits for the economy. These features merit a delayed implementation to allow time for those involved to adjust and implement such alternative arrangements as they consider will allow these cases to continue to be pursued.”
This issue was debated as the LASPO bill passed through Parliament, and an amendment was proposed to exempt proceedings brought by liquidators, administrators and trustees in bankruptcy to recover the assets of the insolvent estate. This was on the basis that HMRC is often a major creditor in insolvency proceedings, and so the reform would lead to a reduction in recoveries by HMRC. The amendment was, however, rejected by the government.