In Focus Collections
pence for each pound of debt and maybe nothing at all. Even where there are assets available for distribution to a company’s creditors, there is often a substantial delay between the company entering into liquidation and the payment of a dividend to the creditors by the liquidator. This delay could be for a period of months or even years.
Issuing a court claim As an alternative to commencing winding-up proceedings, creditors can bring a debt claim against the debtor. Such claims are normally brought in accordance with Part 7 of the Civil Procedure Rules (CPR), which governs the conduct of litigation in England and Wales. Some key points which should be considered
when deciding whether to issue a court claim are: While the litigation is ongoing, the debtor company will still be able to continue trading, and the existence of the litigation is unlikely to aff ect the company’s business reputation signifi cantly. This may increase the creditor’s prospects of recovering the debt owed. If the court proceedings are defended, signifi cant legal costs are likely to be incurred, which are unlikely to be recoverable in full from the debtor even if the claim is ultimately successful. As a general rule, approximately 60% to 70% of costs are recoverable by the successful party. Part 7 court proceedings are likely to take
longer and involve greater expense than proceedings to wind up a company. Court proceedings involve the drafting of statements of case and witness statements (where each party sets out their position) and the disclosure of documents.
If the court proceedings are defended, signifi cant legal costs are likely to be incurred, which are unlikely to be recoverable in full from the debtor even if the claim is ultimately successful. As a general rule, approximately 60% to 70% of costs are recoverable by the successful party
June 2022
If the court proceedings reached trial, witnesses would have to give oral evidence and be cross-examined. Other steps may be involved in the
court proceedings, such as obtaining expert evidence. It may be possible to limit the time and costs involved in court proceedings by seeking an early determination of the claim.
www.CCRMagazine.com
Even if a judgment is obtained against the debtor company, it may still be necessary to enforce that judgment. There are many diff erent enforcement options, but one option is to present a winding-up petition. The court will expect the parties to attempt to resolve any disputes between them by utilising ADR. The court can penalise the parties in terms of costs if they fail to do so. CCR
35
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
