April 9th 2020

Insolvency Litigation Funding – in the best interests of creditors?

Professor Peter Walton (University of Wolverhampton) has today published an important report: Insolvency Litigation Funding – in the best interests of creditors?

The report was commissioned by Manolete Partners Plc and examines the impact of the Jackson Reforms on the insolvency litigation market. It includes survey data from 173 Insolvency Practitioners and other industry professionals. It was also supported by the leading professional organisations, the Institute of Chartered Accountants in England and Wales (ICAEW) and the Insolvency Practitioners Association (IPA).

The main findings are:

  • A 50% increase in the value of insolvency claims since 2015 to £1.5bn per annum
  • Third-party financing of insolvency cases has increased significantly in the past four years
  • There has been a significant shift to financing cases by third parties from ‘no-win no-fee’ methods (‘Conditional Fee Arrangement’ or ‘CFAs’).
  • The use of funders provides a far quicker resolution, reducing costs and leading to a higher recovery for creditors
  • Manolete Partners Plc is the clear market leader of the third-party insolvency litigation market with a 67% share.

The full report is available here.