In an appeal against an order refusing a worldwide freezing order on the basis that the applicant could not show assets somewhere in the world, Lord Justice Longmore has confirmed that it is not enough for an applicant to assert that the respondent was apparently wealthy and must have assets somewhere.
In the case of Newwatch Ltd v Bennett, the court ruled that After The Event insurance (ATE) policies could not be used as adequate security for costs by the claimant companies who were based in Denmark and Jersey.
The court has no jurisdiction to direct a bankrupt to waive privilege in any document, the High Court has ruled (Leeds v Lemos [2017] EWHC 1825 (Ch)).
The High Court also confirmed that legal professional privilege is not the property of a bankrupt for the purposes of the Insolvency Act 1986 and does not automatically pass to their trustee. The Court of Appeal's recent judgment in Avonwick v Shlosberg [2017] EWCA Civ 1138 was considered and applied.
Less than a year after it came into effect on 1 August 2016, the first judgment in relation to the Third Parties (Rights against Insurers) Act 2010 (the TP Act 2010) has been handed down in the case of BAE Systems Pension Fund (Trustees) Limited (the Pension Fund) v Bowmer and Kirkland Limited and others (B&K).
This month we consider the court's view on the extent to which firms' activities in handling complaints are themselves subject to adjudication by the Financial Ombudsman Service; the exercise of the court's discretion in refusing an unopposed application to annul a bankruptcy order; and more cases and issues affecting the industry:
The High Court considers the remit of the FOS's jurisdiction
HMRC has published guidance on its views on the recent changes to the tax rules in relation to company windings up.
The Finance Act 2016 introduced a new Targeted Anti-Avoidance Rule (TAAR) to prevent “phoenixism” – broadly where solvent companies are liquidated so that shareholders dispose of their shares to realise a Capital Gains Tax charge rather than paying income tax on the profits that would otherwise be distributed.
The new rules will broadly apply where:
Bankruptcy and insolvency cases will be dealt with by the Business and Property Courts from 2 October 2017.
Insolvency Practitioners will welcome the change, which will enable insolvency litigation to be dealt with in a more efficient and cost effective manner in the regional centres.
Launch date
Introduction
In the recent case of BPE Solicitors v Hughes-Holland [2017] UKSC 21, the Supreme Court unanimously re-affirmed and clarified the principle established by the House of Lords in South Australian Asset Management Corporation v York Montague [1996] UKHL 10 (the “SAAMCO principle”). This article explains the clarification and the practical consequences it has for those seeking professional advice.
The SAAMCO principle
98% of the liabilities of Lehman Brothers International (Europe) (in administration) (“LBIE”) were denominated in non-sterling currencies. The fall in sterling after LBIE entered administration resulted in significant paper losses for creditors, which they sought to recover from the LBIE estate. The recent decision of the UK Supreme Court in Waterfall I refused to recognize such claims.*
The existing insolvency rules in the UK have been recast with the aim to "modernize and consolidate" the procedural framework for insolvency processes in the UK and promote efficiency. The Insolvency (England and Wales) Rules 2016 (the “New Rules”) came into force on April 6, 2017.
A key feature of the New Rules is a welcome overhaul of the provisions regarding communication with creditors, to allow for electronic communications instead of paper documents and physical meetings.