![[Survey] The end of LASPO for the insolvency industry](https://www.encompasscorporation.com/wp-content/uploads/2016/04/Laspo-Survey.png)
Back in 2010, the incoming Government requested from the Ministry of Justice that they find ways to cut their budget by around £2billion from an overall budget of £9.8billion. LASPO which stands for Legal Aid, Sentencing and Punishment of Offenders was one of the schemes designed for this purpose. It was implemented in 2013 with some exemptions, one of them being for the insolvency sector, an industry that we serve.
The end of LASPO for Insolvency professionals
As an industry sector expert, we are interested in learning your opinions on the changes that could result on the removal of this exemption. The survey is anonymous and we will be publishing the results onto Connections, make sure you subscribe for updates!
From a creditor’s perspective, the removal of the LASPO exception is yet another setback for access to justice.
The removal of the LASPO exemption for insolvency claims risks fewer claims being brought on behalf of creditors against delinquent directors and bankrupts who have placed their assets out of reach before the onset of insolvency.
Creditors will lose out in circumstances where the risk of a Solicitor acting on a contingent basis to recover monies due to the insolvent estate cannot be justified from a commercial perspective by that Solicitor’s firm on the basis that there is no prospect of a success fee and/or the insurance premium being obtained from the other side upon realisations being made.
As ever, it is creditors owed monies in lower value cases that will lose out because the Solicitor’s risk cannot be offset by a success fee and the insurance premium will simply be disproportionate to the sums sought meaning claims will be abandoned at pre-action stage, no realisations will be made and the creditors – ordinary people who run their own business – will lose out.