One pioneer in this area is Toby Duthie, the founder-director of Forensic Risk Alliance, a forensic accounting and investigations business. Duthie became familiar with the US litigation system while assisting European companies responding to US-based litigation. Duthie recognised that there were many differences between the US and the various EU legal systems. For example, unlike in the UK, the application of contingency fees to plaintiff actions is permissible in the US (see above).

The European High Yield Association (EHYA), which represents banks and investors involved in high risk bond and loan markets, has written to the UK Treasury suggesting three key areas to reform insolvency legislation to improve the 'efficiency and fairness' of corporate restructurings.

The letter suggests changes to help prevent value destruction caused by suppliers and customers terminating contractual relations, speed up resolution of disputes and restrict the influence of creditors and shareholders with no economic interest in the revalued business.

At the end of February 2008 new rules were introduced aimed at tightening the existing measures to combat illegal working, by making it more difficult for people to exceed any permission granted to stay in Great Britain or continue working in breach of the conditions imposed on them by the immigration authorities and to make it easier for employers to ascertain whether it is legal for them to engage any prospective employee.

Prevention of illegal working

The number of individual voluntary arrangements (IVAs) is set to soar to over 50,000 this year, according to industry sources. This follows two years in which the number of IVAs has been slightly more than 40,000 per year.

Secured creditors with an unsecured shortfall cannot claim a share of the prescribed part of the floating charge realisations set aside for unsecured creditors under Section 176A of the Insolvency Act 1986. This applies whether the secured creditor is the holder of a fixed or a floating charge (or both).

The retail sector and its suppliers operate at the sharp end of the economy and feel the impact of tighter consumer spending with more immediacy than most other sectors.

Summary

The Case

This is the first time that the HGCRA has reached the House of Lords. The dispute here, which related to the payment part of that legislation, highlighted the tension between an employer’s payment obligations and the impact on those obligations of the contractor going into administration. Here, on 2 May 2003, Melville applied for an interim payment. No withholding notice was served. The final date for payment was 16 May 2003. Wimpey did not pay, but on 22 May 2003 administrative receivers were appointed.

In a judgment useful to insolvency practitioners, a court has recently confirmed that liquidators are not personally liable for payment of dividends. In Lomax Leisure v Miller and Bramston [2007] EWHC 2508 (Ch) Miller and Bramston faced personal claims on dividend cheques they had cancelled, after receiving a pending application from a creditor whose claim they had rejected. Miller and Bramstom were later replaced by a new liquidator who brought claims in the name of the company and various creditors.

Background