2015 was a year of significant change for our industry.
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Vernon Dennis, Partner
Insolvency processes continue to fall in volume (we see no change there) and changes to legislation included the ability to assign ‘office-holder’ claims and the requirement for fee estimates - some changes were perhaps more welcome than others.It will be particularly interesting to see how the market for the assignment of claims continues to develop. We predict that IPs, legal teams and investors will work together to create a market for a ‘packaged product’. That will be quite a cultural shift but no doubt provide an opportunity to realise value from claims where it was not previously economic.
With a slight sense of déjà vu, we are all preparing for the end of the LASPO exemption in April. The estimated £480m windfall for dodgy directors that is expected to be the result was, apparently, not enough reason for the exemption to remain. The Government presumably considers that the industry has now adapted for the change. Do you feel ready?!
We predict that 2016 will see the march of the litigation funder further into insolvency territory.
Sealy & Milman is getting a makeover this year with the Insolvency Rules 2016 expected to come into force in October. The stated aim is to consolidate and modernise the rules and reduce red tape. The rules will bring in significant changes to insolvency practice, moving away from creditor meetings and towards electronic participation, and also to the layout of the rules themselves, in what appears to be a sensible new arrangement.
Measures from the Deregulation Act 2015 and SBEEA 2015 will continue to be introduced through 2016 to reduce the administrative burden on IPs, with the intention that this will increase returns to creditors. It will be interesting to hear how ‘deregulated’ IPs feel overall in the course of this year. We predict delays and a fair amount of confusion!
The new approach to D-reporting is expected to come into force in April. With the extended requirement for office-holders to report in all cases, the simplified, electronic reporting process should make the process more efficient, as intended. Feedback from those who have had an opportunity to try the online reporting system is positive but the reliance on performance indicators in the processing of the reports has caused some to voice concern. We predict IT glitches!
The changes in relation to director disqualification would seem to provide the opportunity for more proceedings to be brought against delinquent directors but we don’t predict an increase in resourcing for the Insolvency Service.
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