When Clients Go Bankrupt, Who Pays?
This week in the United Kingdom, a case is being heard involving the ligation powerhouse Cadney, regarding their former client Peak Hotels & Resorts Limited. The case involves Peak’s insolvency and inability to pay £4.7M in fees and outstanding costs. The UK Supreme Court justice presiding over the case stands to grapple with the thematic undertones of litigation finance, and whether a lien should be considered litigation funding or not. LawGazette.co.uk asks the question if attorneys should be penalized for protecting themselves when a client is unwilling to issue due payments. It appears that the case may hinge on whether Cadney’s “deed” or “lien” against Peak is structured as a litigation finance agreement. Cadney foreshadows an unsuccessful ruling in the case would result in chilling industry effects. However, Peak seems to be arguing the structure of the deed harbors rights and rules associated with a losing litigation finance agreement, henceforth Peak is not liable for fees. The case is ongoing; and we will continue to provide updates as they arise.