PARLIAMENTARY WRITTEN QUESTION
Insolvency (20 November 2014)

To ask the Secretary of State for Business, Innovation and Skills, what assessment he has made of the effect on financial redress for creditors from April 2015 of changes to funding of insolvency litigation in the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

Asked by:
Mr Toby Perkins (Labour)

Insolvency trade body, R3, commissioned research to try to measure the impact of the civil justice reforms on insolvency litigation. This research estimates that contingency fee arrangement backed insolvency litigation realises £150m-160m per annum.

When the exemption for insolvency proceedings was introduced in 2013 the impact assessment made the assumption that by April 2015 alternative funding arrangements would have been developed for insolvency cases. On that basis it was assumed there would be no major impact on the volume of insolvency cases which were pursued, or on the value of assets recovered in the long-run, although the risk of recoveries falling was acknowledged.

Answered by:
Jo Swinson (Liberal Democrat)
27 November 2014