Insolvency Practitioners have been nervously awaiting the impending expiration of the 2-year exemption for insolvency proceedings from the effects of sections 44 and 46 of Legal Aid, Sentencing and Punishment of Offenders Act 2012. Together with claims for damages in respect of diffuse mesothelioma and those relating to publication and privacy, insolvency proceedings were temporarily sheltered from the effects of the Jackson Reforms by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 5 and Saving Provision) Order 2013 (SI 2013/77), which enabled such proceedings to continue recovering CFA success fees and ATE insurance premiums.

In a somewhat unexpected, but by no means unwelcome, turn of events, the Minister of State for Justice has today announced that the temporary exemption for insolvency proceedings will remain in place for the foreseeable future. Whilst no time period has been provided, the Government announcement is clear that the decision is “to provide insolvency professionals with more time to adapt to changes to civil litigation funding”, suggesting that the extension of the exemption is by no means a permanent fixture. It does however demonstrate that Insolvency Practitioners’ protests have not gone unheard and that there is some appreciation for the individual nature of such proceedings.

For further information regarding this topic, or any other insolvency and restructuring matter please contact a member of our Insolvency & Restructuring team.

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