Government asked to reconsider reform plans

Liza Bailey and her daughter Helen Bailey took part in Small Business Saturday last year at their florist shop Seaside Florist on Hayling Island.

Picture: Malcolm Wells

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A GROUP of Hampshire and Dorset insolvency experts has warned government legal reforms could cost creditors more than £160m a year from next April – with rogue directors the big beneficiaries.

The Southern Committee of R3, which brings together insolvency experts from companies such as Quantuma, Coffin Mew and Baker Tilly, is backing a call for the government to scrap the planned change.

Nationally R3, the insolvency trade body, has joined forces with a number of high-level business groups to send a letter to the prime minister and justice secretary asking them to reconsider.

From April 2015, insolvency litigation will no longer be exempt from the crackdown on ‘no-win, no-fee’ legal funding, introduced by the 2012 Legal Aid, Sentencing and Punishment of Offenders Act.

Andrew Watling, chairman of the Southern Committee of R3 and a director at Quantuma, said: ‘These changes are anti-business, will increase tax avoidance and evasion, and will benefit directors of insolvent companies who have committed fraud or behaved recklessly.’