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Insolvency: Legal Costs

Question for Ministry of Justice

UIN 23890, tabled on 25 January 2016

To ask the Secretary of State for Justice, what assessment he has made of the costs and benefits of the current funding regime for insolvency litigation between 26 February 2015 and 17 December 2015.

Answered on

2 February 2016

Since the passage of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012, it has always been the government’s stated intention that the exemption for insolvency cases would be temporary. Commencement of Part 2 of LASPO’s conditional fee (or ‘no win no fee’) arrangement reforms for insolvency, was announced in December and will apply from April this year. The aim of LASPO’s reforms was to control the cost of civil litigation.

Ministry of Justice Officials discussed Professor Walton’s report with him, but the Ministry of Justice did not agree with his conclusions. Officials have also met representatives of insolvency practitioners who use no win no fee arrangements to fund these cases, as well as those who fund them in other ways.