A series of reforms are called on by R3 by the next Government
R3 is calling for the next government to commit to a series of reforms of the UK’s insolvency regime in order to ensure a better deal for small businesses, taxpayers and struggling individuals.
The reforms R3 are calling for include:
- Legal funding in insolvency cases
- Help get money back from rouge directors to creditors
- The treatment of small business creditors in football insolvencies
- The government’s approach to being a creditor in insolvencies
- A comprehensive update of the personal insolvency regime
Grahame Rumney, Chief Executive of R3 says: “The challenges that face business and personal finances are constantly changing and it is important the insolvency regime is regularly reviewed and updated to keep pace with those changes.”
The following policies are a few of what R3 would like to see the next government commit to in the run-up to the 2015 General Election:
LAPSO Act (Legal Aid, Sentencing and Punishment of Offenders)
As a result of legal action against directors of insolvent companies who have wrongly taken creditor’s money, £160m is returned to creditors every year. This is down to an exemption for insolvency litigation funding from the LASPO Act which will expire in April 2015.
R3 would like to see this exemption made permanent.
A comprehensive update to the personal insolvency regime
A comprehensive review is being requested as the personal insolvency regime has not been reformed as a whole since 1986. Steps such as updating the entry requirements for bankruptcy and ebt relief orders would be a starting point.
Grahame Rumney says: “Insolvency is about striking the right balance between creditors’ and debtors’ needs. Sometimes, existing legislation and regulation can make this balance difficult to achieve. These reforms are about getting small businesses, taxpayers, and indebted individuals a better deal from insolvency.”
We will have to wait and see what the next government decides in regards to the insolvency regime, and if the above proposed policies are acted upon.