Lawyer Monthly - February 2023

As we enter 2023, it is interesting to speculate about which trends we will see emerging in the Scottish litigation market in the coming year. From insolvencies and class actions to changes to legal regulation and the availability of litigation funding, we anticipate these five trends in 2023. Richard McMeeken is a partner and solicitor advocate in the commercial litigation team at independent Scottish law firm Morton Fraser. Richard McMeeken Partner and Solicitor Advocate Morton Fraser Lawyers Quartermile Two, 2 Lister Square, Edinburgh EH3 9GL Tel: +44 0131 247 1035 Starting with the most obvious, we are expecting to see a marked increase in insolvency litigation. The ‘tsunami’ of insolvencies that was anticipated following the pandemic has not yet materialised, and while London is starting to see bigger waves in that practice area than it did last year, Scotland is yet to see as significant an increase in cases. It is likely that this will change in the year ahead and there are signs that it is already starting to do so. This may be driven by larger insolvencies which cause ripple effects in the market, but the real uptick in cases may be in relation to the conduct of directors during the pandemic. Scotland is already seeing a rise in claims against directors either by insolvency practitioners, creditors or shareholders and it seems clear that this trend is likely to continue. Beyond insolvency litigation, we predict that claims against directors are also likely to rise. In 2022, we saw several petitions made by shareholders seeking relief from unfairly prejudicial conduct under section 994 of the Companies Act. Those sorts of claims, combined with derivative proceedings, are likely to be a feature of the legal landscape in 2023 as well. While the pandemic may be responsible, it is interesting to reflect on the reasons for the increased claims in these areas. Financial pressure on businesses or the individuals in charge can lead to people behaving in a way that they otherwise would not, and occasionally the decisions taken when under that sort of pressure can be open to criticism. So, even beyond insolvency, company directors need to be mindful of the prospect of claims in the coming year and early advice will often be key to protecting their position. SPECIAL FEATURE 27 Insolvency Litigation is Due toRise It is likely that this will change in the year aheadand there are signs that it is already starting to do so. DirectorsMay Be Liable to Claims 1 2 "

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