Insolvency litigation is a highly specialised area of commercial litigation, often involving claims relating to director misconduct, wrongful or fraudulent trading, transactions at an undervalue, unlawful preferences, asset recovery and breaches of fiduciary duty. Successfully pursuing these matters can require experienced insolvency practitioners, a specialist law firm and access to appropriate litigation finance.

For office holders, creditors and businesses dealing with insolvent companies in Worthing and the surrounding area, securing the right funding solution can be important when seeking to maximise potential recoveries. At Annecto Legal, we help clients access tailored insolvency litigation funding, ATE insurance and flexible litigation finance arrangements, allowing viable insolvency claims to progress while helping to reduce financial risk and protect the insolvent estate.

Why insolvency litigation funding matters in Worthing

Worthing has a diverse business community covering a range of industries and commercial sectors. When a local business becomes insolvent, disputes involving directors, shareholders, creditors or third parties can quickly become complex and costly. Insolvency practitioners may need to investigate transactions, identify misconduct and take action to recover assets for the benefit of creditors.

Pursuing insolvency claims can involve significant legal expenses, including solicitors’ fees, barristers’ fees, expert reports and court costs. Without appropriate funding, potentially valuable claims may not be pursued, potentially limiting the amount that can ultimately be recovered for an insolvent company or its creditors.

Working with experienced litigation funders can allow insolvency practitioners and office holders to pursue litigation without relying entirely on the funds available within the insolvent estate. The right funding arrangement can help manage legal costs, reduce financial exposure and provide the resources needed to pursue potentially valuable claims.

Insolvency litigation funding options

Every insolvency case is different, so the most suitable funding structure will depend on factors including the merits of the claim, anticipated legal costs, potential recovery and prospects of success. Annecto Legal can help identify and assess the options available.

Conditional Fee Agreements (CFAs) – A Conditional Fee Agreement can allow solicitors to defer some or all of their fees until a successful outcome is achieved. This can reduce the immediate financial burden on an insolvent company while enabling viable claims to proceed.

Contingency fee agreements – Under a contingency arrangement, legal fees are generally calculated by reference to an agreed percentage of the damages or settlement recovered. This can provide a funding solution that links legal costs to the outcome of the claim.

Assignment of insolvency claims – Certain insolvency claims may be capable of assignment to third-party purchasers in return for an upfront payment or a share of any future recovery. This can provide immediate value to an insolvent estate while transferring some of the litigation risk.

After the event insurance – After the Event (ATE) insurance can provide protection against certain adverse costs orders where litigation is unsuccessful. When combined with other funding arrangements, ATE insurance can help insolvency practitioners pursue claims while limiting their potential financial exposure.

Third party litigation funding – Professional litigation funders can provide finance through structured funding agreements, generally in return for a share of a successful recovery. Depending on the circumstances, funding may contribute towards solicitors’ fees, counsel’s fees, expert reports, court fees and other litigation expenses. This can enable substantial insolvency claims to proceed where an insolvent estate has limited resources.

Choosing the right funding strategy

Selecting the right funding strategy requires careful consideration of the claim’s merits, anticipated legal costs, potential recovery and the objectives of the insolvency practitioner or office holder.

For some claims, a Conditional Fee Agreement supported by ATE insurance may provide an effective solution. More substantial or complex matters may require specialist insolvency litigation funding from professional litigation funders, particularly where significant costs are likely to be incurred before a recovery can be achieved.

The objective is to establish a funding structure that allows insolvency practitioners to pursue litigation while protecting the assets of the insolvent estate and seeking to maximise the return available to creditors.

How Annecto Legal can help

Annecto Legal works with insolvency practitioners, office holders, creditors and law firms in Worthing to secure specialist insolvency litigation funding and insurance for a wide range of claims.

We assess the circumstances and merits of each case, advise on potential funding structures and work with established litigation funders to identify appropriate and competitive solutions. We can also arrange ATE insurance to help protect against adverse costs and reduce financial risk throughout the litigation process.

By helping to reduce upfront legal costs, manage litigation expenses and arrange appropriate litigation finance, Annecto Legal supports insolvency practitioners and office holders seeking to pursue insolvency claims in Worthing and maximise potential recoveries for creditors.