Insolvency litigation: a problem inSolved
TP inSolve – what is it?
TP inSolve is a new and innovative litigation product for insolvency practitioners (“IPs”). It empowers IPs by providing options that will produce flexible and commercial solutions to all litigation problems. The service is transparent, time and cost effective and ultimately focused on achieving an IP’s objectives.
Why do some IPs not litigate?
Some IPs can understandably be reluctant to embark upon litigation. There can be a number of different reasons for this, which include:
- a desire to bring an officeholder appointment to a timely conclusion, by avoiding drawn-out court proceedings; and
- the inherent risks of litigation, including losing a claim, paying an adverse costs order, or failing to then make a financial recovery from an opponent.
TP inSolve – why now?
Recent legislative changes will increase the reluctance that some IPs have of bringing court proceedings. The changes include:
- from 6 April 2016, the inability to separately recover from an opponent any fee uplift that lawyers may charge, nor the premium payable for any ATE insurance policy, resulting in either more privately-funded litigation, or a smaller recovery pot once deductions have been made from damages;
- from 1 October 2015, fee estimates and approval mechanisms for an IP’s costs will result in difficulty recovering an IP’s costs spent upon litigation, which have not received prior approval from creditors; and
- from 1 October 2015, IPs may assign causes of action held in their capacity as officeholder to third parties.
The way in which traditional insolvency litigation services are provided by solicitors will therefore be increasingly unattractive. As a result, there is a real risk that IPs will be unable to realise value from their claims for the benefit of creditors.
TP inSolve – what types of claim?
TP inSolve is aimed primarily at claims which seek the recovery of assets that have been extracted from insolvent estates. However, TP inSolve can provide solutions to IPs for any contentious dispute resolution process and all types of dispute will be considered.
We will establish at an early stage whether a claim is viable or not, by identifying:
- that there is an underlying claim with good merits;
- the extent of the value of the claim; and
- good prospects of a financial recovery.
Does TP inSolve understand my approach to litigation?
TP inSolve caters to all types of IPs, whether they are interested in assignment, or are keen to litigate themselves. TP inSolve provides wide ranging solutions for both:
- those IPs that wish to retain control and ownership of the litigation, albeit in a streamlined, transparent and cost effective fashion; and
- those IPs that are reluctant to bring proceedings, and want the opportunity to assign their claim at an early stage, so that value in the claim can be “unlocked”.
I have never assigned a claim before – what’s changed?
Causes of action are now considered an asset of an insolvency estate, and can be assigned to secure funding to pay an IP’s costs and a better and more timely return for creditors.
An IP may now choose to assign a cause of action because:
- they have insufficient funds to pursue the claim on behalf of the insolvent estate;
- the value of the claim is disproportionate to the level of costs that would be incurred;
- they do not consider it to be worth pursuing in light of the factual complexity, or the uncertainty of recovery; and/or
- it is an effective way, from both a time and costs perspective, to realise value for the insolvent estate.
TP inSolve - what are the details?
From day one, we will provide you with details of the steps we propose to take to progress your claim. Those steps are set out in standard, easily understood, TP inSolve Phases. You will therefore know from the very outset how we propose to deal with your instruction, and within what timescales.
We will also discuss with you at the outset your specific objectives, preferences and appetite for litigation. The standard TP inSolve Phases may not be appropriate for you. However, they are flexible and we will agree to tailor them to your exact needs. For example, you may be keen to realise the value in your claim immediately, and we can take steps to have the claim assigned at the outset, without pre-action correspondence needing to take place.
As and when instructed, we will approach and test the litigation funding market to obtain details of solutions available to you. We will provide you with different TP inSolve Options in an easy to understand, standard format.
You will be able to compare the different solutions on offer, which can include:
- full or partial funding for your costs from a reputable funder;
- the claim or underlying property being assigned to release instant funds for the insolvency estate; and/or
- a more traditional conditional fee agreement, supported by an adverse costs insurance policy.
You will then be able to choose, with our assistance, which of the available TP inSolve Options is best for you.
With little time and effort on your part we may be able to quickly realise significant value in the claims and you will have discharged your officeholder duties. This work can be undertaken for you at no cost.
Please contact the TP inSolve team at firstname.lastname@example.org or telephone to 0161 833 1212.
You can also follow our Twitter account @TP_Insolvency to keep track of everything Insolvency related. The account is run by our Insolvency team to provide the latest updates, blogs and news from the Insolvency world.