The letter, signed by groups including R3, the Institute of Credit Management and the British Property Federation warns that rogue directors will be the main beneficiaries from the legal reforms to insolvency.
It adds that the proposed reforms are ‘anti-business’ and ‘fly in the face of available evidence’, undermining the Business Secretary’s efforts to combat ‘dodgy directors’.
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 (the Jackson reforms).
This type of funding is often the only way creditors can afford to pay for court cases to retrieve money from rogue directors that have wrongly taken money out of a failed business.
Frances Coulson (firstname.lastname@example.org)