Trade Body R3 have called for the Government to commit to a series of reforms to the UK Insolvency regime.
In particular R3 have asked for reforms to:
- Legal funding for Insolvency cases
- Returning money from rogue directors to creditors
- The treatment of small business creditors in football insolvencies
- The governments approach to being a creditor in insolvencies
- A comprehensive update of the personal insolvency regime
Each year the sum of £160 million is clawed back using legal action from directors of insolvent companies who have wrongly, negligently or fraudulently taken creditors funds.
The only reason that this is currently possible is due to an exemption for insolvency litigation funding from The Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act, which will expire in April 2015.
The call for the Personal Insolvency Regime to be reformed is due to the fact that it has not been updated as a whole since 1986 and a comprehensive review is required. Steps such as updating the entry requirements for Bankruptcy and Debt Relief Orders (DRO).