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|£25m Claims Flood In To Beat Deadline|
|Tuesday, 19 April 2016|
Sheffield based debt recovery and legal claims specialists CRS Group have received additional claims since the start of the year totalling £25m from insolvency practitioners keen to beat changes in legislation.
CRS has established itself as construction and commercial debt recovery specialists with a niche pursuing legal claims debts on a no win no fee basis on behalf of creditors of insolvent companies where claims would otherwise be unaffordable. CRS is now pursuing a total of £60m in legal claims.
The cost of bringing these claims have until recently been recovered from the debtor but are also underwritten by After the Event (ATE) insurance policies.
In December last year, the government announced that a concession to insolvency practitioners bringing these claims would be withdrawn. The concession allowed the costs of claims being brought on behalf of insolvent companies to be recovered on top of any win. The change now means that any costs can only be paid out of the proceeds thus reducing the benefit to creditors. The change came into effect on 1 April.
Tim Shore, Managing Director of CRS Group said “We are extremely pleased that insolvency practitioners and creditors have heeded our warnings to get claims filed before the change takes effect. The government’s changes are absolutely contrary to the interests of creditors, particularly those in smaller cases which will now be penalised and some claims will no longer be cost effective to pursue.”
“We will continue to vigorously pursue these claims irrespective of whether they were brought under the old or new legislation.” He added
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