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Solvent schemes back in the UK… for now

Last week’s decision by the Inner Court of Session, which upheld Scottish Lion’s appeal against the dismissal of its proposed solvent scheme of arrangement drew blanket coverage in the (re)insurance press.

The original decision had effectively put schemes of arrangement on hold in the UK when Lord Glennie recognised the fundamentals of objections by policyholder in September last year.

Now this reversal puts the traffic lights firmly back on green, certainly according to administrators PricewaterhouseCoopers (PwC), who are quoted in The Insurance Insider.

However, legal experts from Elborne Mitchell seem less convinced. Speaking to Post they predict that this one is set to run and run.

Indeed, some may say it already has, as this case just appears to reopen the issues examined under the BAIC scheme back in 2005. That decision was supposed to have cleared the obstacles to successful solvent schemes in the UK, but here we are again.

You do have to wonder who the winners will be from all these legal proceedings? Scottish Lion’s policyholders? The firm’s creditors?

More likely it will be the members of the legal profession who find gainful employment from it all… oh, and those who report on such matters.

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