Hello everyone,
The Court of Appeal has released a variety of cases this week dealing with such topics as wrongful dismissal, bankruptcy and insolvency, pensions, real estate, and residential landlord and tenant. The most notable decision by far this week is the Groia v. The Law Society of Upper Canada decision in which the court dismissed the member’s appeal from his conviction for professional misconduct. Apparently, according to the Toronto Star, Mr. Groia will be seeking leave to appeal to the Supreme Court of Canada, so this long-running saga is not over yet.
Just what is an account receivable has been the subject of much debate, because it determines what assets are used to satisfy preferential claims, i.e. who gets paid first in a receivership or liquidation. In 2008, the High Court judgment in Commissioner of Inland Revenue v Northshore Taverns (in liq) confined “accounts receivable” to “book debts”. Although since criticised, that judgment was the only judicial authority on the point.
There remains much economic uncertainty ahead and it seems that insolvency practices are likely to continue to remain important drivers in accountancy firms. However, insolvency practitioners are facing increased regulation and public scrutiny. They need to remain on top of their game to navigate safely through stormy waters, as Ross Goodrich reports.
Background
When a person is unable to pursue a claim against someone who has been made bankrupt on account of the bankruptcy having been discharged, it may still be possible to pursue the claim against the bankrupt’s insurers, following a recent ruling.
The case involved 12 claims for breach of trust against nine solicitors and a Mr Dixit Shah. It was brought by the Law Society and 19 of the various clients of the solicitors.
The case of Law Society v Dixit Shah (2007) EWHC 2841 (Ch) arose from the intervention of the Office for the Supervision of Solicitors into an association of firms owned by Dixit Shah which traded under "the BJ Brandon Group" name. The Law Society alleged that the OSS discovered that around £12.5 million of client money had been misappropriated by Mr Shah.
The demise of the ARP after 30 September 2013 and the prospect of new entrants to the solicitors’ professional indemnity market creates the possibility of more incidences of insurer insolvency. We look at the consequences for firms insured by those insurers.
No financial stability requirement for qualifying insurers