Insolvency Express trials pilot scheme

Looking for faster and more cost effective bankruptcy and companies court litigation? The express trials scheme may be for you.

What is it?

The Scheme started on 1 April 2016 and is operating in the Bankruptcy and Companies Courts of the Chancery Division of the High Court (Rolls Building, Fetter Lane, London), for two years. The aim of the Scheme is to achieve shorter and earlier trials for simple applications before the bankruptcy registrars at reasonable and proportionate cost.

Which applications are suitable ?

The type of applications the Scheme is intended to be of relevance to are:

• Applications which can be disposed of in no more than two days.
• Applications which require limited directions and disclosure of documents. 
• Applications where the costs of each party will not exceed £75,000 (excluding VAT and court fees but including any uplift on conditional fee agreements).

Some Details of the Scheme

• The Applicant must file its evidence in support at the time the application is issued. 
• Evidence in support or reply should exhibit all the documents relied upon. 
• The initial directions hearing will take place no more than 45 days from the date of issue of the application for 30 minutes hearing. 
• Evidence in reply to the application must be brief and filed and served no later than 14 working days before the directions hearing. The applicant can file and serve any further response in reply no later than 7 working days before the directions hearing. 
• The final hearing date should be within 3-6 months of the directions hearing. 
• A costs cap of £75,000 (excluding VAT and court fees but including any uplift on conditional fee agreements) will be imposed.

Implications of the Scheme

The substantive costs of undertaking civil litigation within England and Wales has been well documented by Lord Justice Jackson’s 2009 report, being a review of civil litigation costs. An important point highlighted in Lord Justice Jackson’s report was that in some areas of civil litigation costs are disproportionate and actually impede access to justice.

In terms of insolvency office holders seeking to ensure that assets are got in, realised and distributed to creditors, it is hoped that the Scheme, by allowing parties in prescribed types of cases to undertake bankruptcy and companies court litigation in a swifter and more cost effective framework, will assist office holders to effect recoveries for the benefit of the insolvent estate by means of a quicker and cheaper litigation process. A potential knock on benefit to creditors may be seeing insolvency processes closed in a more timely manner and therefore distributions being made to creditors at an earlier stage than would otherwise usually be the case.

It remains to be seen whether respondents to office holder initiated litigation could be prejudiced by having claims resolved under this process, in circumstances where they may no longer have access to the company’s books and records, and where under the Scheme they will have more limited time available to prepare their response to the proceedings.