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.’