Select Page











How Annecto Legal helped on an insolvency case with an intransigent defendant

How Annecto Legal helped on an insolvency case with an intransigent defendant

insolvency case

In the complex landscape of financial transactions and business dealings, insolvency is an issue that demands careful consideration and resolution. For insolvency practitioners (IPs) striving to ensure that unpaid creditors recover as much of their debt as possible from insolvent companies, impending litigation can be a large question mark looming over realising debtor’s assets.

For IPs, their focus is on the risk versus reward – mitigating the potential expensive legal costs against the ability to recover valuable assets for the benefits of creditors. Given that insolvency claims can incur substantial expenses, it is vital to be well-informed about funding options to guarantee a cost-effective approach to insolvency claims. 

At Annecto Legal, we recently assisted an insolvency practitioner in securing ATE insurance and litigation and funding for a case valued at £300,000.

How Annecto Legal assisted on an insolvency claim with an intransigent defendant.

Annecto Legal recently assisted on a relatively straightforward insolvency claim for around £300,000 in damages. The defendant in question was refusing to engage in any meaningful fashion until the claim had been issued.

However, the insolvency practitioner was reluctant to secure any form of litigation funding or ATE insurance as they were concerned about giving away large sums to the funders or insurers if the case settled as soon as it was issued.

As a solution, Annecto Legal helped to secure ATE insurance and funding for disbursements (including issue fee) for a particularly low fee if the case was settled within the first six months after the claim was issued.

Once informed of the funding and ATE insurance in place, the defendant settled without the need to issue the claim at all. The cost of the funding and ATE insurance that helped to secure this settlement was less than £20,000. This ensured that the insolvency practitioner was not required to part with large sums and helped to reach an early settlement.

Funding insolvency claims

Insolvency practitioners involved in insolvency claims can make use of the following funding methods.

After-the-event (ATE) legal insurance – ATE insurance is generally used to protect from adverse costs risks & security for costs requirements. After-the-event (ATE) legal expenses insurance is perhaps best thought as a similar to a ‘swap’. For either no upfront fee or a small upfront fee, the insurer takes on all of the risk of the potential adverse costs award. The claimant has swapped their obligation to pay the defendants in the event of a loss, with the obligation to pay the insurer in the event of a win.

This ‘swap’ is generally an attractive option as the client is likely to be in a better financial position following a win than following a loss. Also, the payment to the insurer will only be a percentage of the adverse costs rather than the whole amount.

Third party litigation funding – In some cases, third party litigation funders may be willing to provide funding for an insolvency claim in exchange for a percentage of any financial settlement or damages awarded. This option can be attractive for individuals who cannot afford to pay for legal fees themselves but have a strong case. ATE insurance is often used in conjunction with this type of funding.

How Annecto Legal can assist insolvency practitioners

Annecto Legal can help to ensure that insolvency practitioners have an insight into the options that are available to them. Our professionals have extensive knowledge of the market, including a wide range of litigation funders and after-the-event (ATE) legal expenses insurers.

At Annecto Legal, we understand which funders and insurers are interested in what type of case and what on what terms. Most importantly, we can help to ensure informed choices are made and justified to the creditors. We can assess offers, explain differences, and provide a broader understanding of how funders and insurers work.

A further advantage is that IPs can access the service with no upfront costs, and their fees are often paid by the funders or insurers upon the successful conclusion of a claim.

Whether or not the decision is made to move forward, the insolvency practitioner is now in a position to make an informed choice and to show that they have made appropriate attempts to get the best terms for their client.

Why choose Annecto Legal?

At Annecto Legal, we assist a wide range of clients in finding the appropriate insolvency litigation funding, assignment options and after-the-event (ATE) insurance.

Annecto Legal regularly assists licensed insolvency practitioners and liquidators who are involved in the administration or liquidation of a company, as well as trustees in bankruptcy. If you are in the process of pursuing or defending an insolvency claim and want to find out whether we can assist in helping you fulfil your obligations and secure the right deal, then contact Annecto Legal now.

Get in touch

* Annecto Legal can only assist on case where the loss is in excess of £100,000, with the exception of data breach claims. If you need assistance on a claim worth over £100,000, please get in touch using our form or the details below:

Registered Office

Annecto Legal Ltd, 106 Kennedy Building, Murray Street, Manchester , M4 6HS


0800 612 6587


Contact us directly