Topic: Insolvency, Restructuring and Run-Off

Scottish Lion appealed against a judgment delivered by Lord Glennie in which the petition for the proposed scheme of arrangement was dismissed. 

In Clydesdale Financial Services Ltd and others v Robert Smailes and others [2009] EWHC 3190 (Ch), the principal issues before the Court were whether the third claimant, Focus Insurance Company Ltd (Focus), had a real prospect of success in its claims to be, first, a creditor (under the Insolvency Act 1986) of the fifth defendant, Alexander Samuel LLP (LLP) in respect of unpaid premiums and, second, a “victim” under ss.423-425 of the Insolvency Act 1986 of the sale of LLP’s business to Jiva Solicitors LLP (Jiva) effected around the same time as it went into administration. 

In a judgment issued on 15 December in the English High Court (Lehman Brothers International (Europe)(in administration) v CRC Credit Fund Limited & Ors [2009] EWHC 3228), and based on assumed facts presented to him, Mr Justice Briggs described the failure by LBIE to protect client monies from the impact of insolvency as “truly spectacular” and involving “shocking underperformance“. 

As reported here, the Third Parties (Rights Against Insurers) Bill is slowly making its way through the UK parliamentary process. The proposed legislation, to allow claimants to sue an insolvent defendant’s insurer without having to establish the defendant’s liability first, is due for another reading in the House of Lords today.