600 Cases and Counting

The Government’s response to the pandemic continues to weigh heavily on formal insolvency activity in our sector. Despite this, Manolete was delighted to recently announce the signing of its milestone 600th case investment and at the time of writing we have now signed 613 UK insolvency cases.

In reaching this total, we have worked with around 200 separate UK Insolvency Practitioner firms, often with multiple offices of those firms. Every IP that has ever had a case backed by Manolete has (without exception) come back with further cases – because the model delivers excellent results in fast timescales.

The overwhelming response from professionals to a completed case is a very pleasant surprise that a long running and difficult matter has been concluded swiftly and efficiently. On the rare occasion a recovery is not achieved, Manolete bears the full costs. The IP retains the initial consideration paid and naturally all lawyers (solicitors and counsel) are fully paid for the work done – we shoulder the entire loss.

The increase in our cases continues to be largely driven by taking assignments of cases. With the case running in our name, many IPs are clearly attracted by the full cost protection this provides the office holder as well as the Insolvent Estate – as one senior IP said to me once: “it gives us a free shot at goal”.

However, even where we are taking an assignment (rather than funding the office holder), the IP always gets:

1. The choice of which solicitors are to work on the case;
2. The same high level of immediate cash consideration from Manolete (which goes to defray a material amount of historic IP and lawyer WIP);
3. Whether and to what degree to stay involved in the case. Even on assigned cases, it is very normal for the IP team to prepare and attend any mediations or Without Prejudice meetings. Their input is often crucial.

Many thanks to each and every professional we have worked with on the first 600 cases – it has been a great honour for our team to work with you on the incredibly important work you do.

Steven Cooklin, ACA ACSI CF
Chief Executive, Manolete Partners PLC

In this issue:

• Introduction from Steven Cooklin, Chief Executive

• Manolete’s New Chief Operating Officer, Nick O’Reilly

• Witness Protection by Stephen Baister, Non-Executive Director

Manolete’s New Chief Operating Officer

So much has happened in the world since I joined Manolete in November 2019 as Associate Director covering London and the South East. The company has continued to sign and complete cases at a terrific rate while also quickly adapting to very different business working practices in the last year, for reasons that are all too familiar.

I was delighted when recently the Manolete Board offered me the opportunity to become COO of Manolete (with effect from 1 April 2021). In my time at Manolete, I have learned much about the robust systems and efficient procedures we employ and I am really looking forward to helping the business continue its impressive growth so far. I am confident my appointment will further enhance the well-established partnership approach we take with Insolvency Practitioners and their solicitors.

I had known our Head of Legal, Mena Halton through working with her many years ago and had met Steven (and Manolete) from working on a case when I was an Insolvency Practitioner which had settled quickly and efficiently.

Having already been impressed with the business model prior to joining, I have to say I have been blown away by the quality of the team Manolete has assembled to oversee the cases we purchase or fund. All team members work collaboratively without exception and the experience, expertise and sound judgements they all demonstrate means practitioners and lawyers instantly feel confident their cases are in safe hands. I speak frequently with Insolvency Practitioners who echo my views on the quality and approachability of the team.

The percentage of cases we actually take on is not as high as you might imagine. It gives me comfort we are not taking any unnecessary risks to increase market share. Sitting down with Steven and Mena after I joined made me appreciate the skills and foresight they deploy in their roles as members of the Investment Committee. They quickly establish which cases are likely to succeed and which cases carry too much risk – not just for Manolete but for the IP or lawyer contemplating issuing proceedings. Their decisions are well reasoned and that approach means we have quality cases ongoing where we are confident we will deliver outstanding returns to the insolvent estate and to the creditors.

One issue we often discuss at our regular fortnightly team meetings is ethics. We intend to be in business for a long time and we want to ensure we are always seen as a market leader both by the volume of the business transacted but also through the nature of the business we represent. Manolete will always do the right thing even if that means discontinuing cases after we have commenced them. We demonstrate high professional standards and this is demonstrated in the way the whole team deals with difficult decisions - we never shy away from making the right choice even if it could potentially mean a loss for Manolete. The whole culture of the business is not to blame but to move on, learning lessons which will help the business in the future.

Having Stephen Baister as part of our team also helps enormously. Stephen’s years of sitting in judgment on insolvency cases and his excellent knowledge of the court system enables us to discuss cases from many angles before deciding what decision is best.

One of the areas I help to co-ordinate is our relationship database. The experience of the regional Associate Directors in their respective marketplaces means we offer local expertise to the local markets. We all share knowledge and often work together to present Manolete’s offering to IPs or lawyers who have yet to work with us.

I look forward to catching up with my friends and contacts in my new role as COO. Although I will be more involved in the operational side of the business assisting Steven and the Board of Directors, I will still be responsible for business development with the London team, so I am very much looking forward to getting out and about once full lockdown ends.

Nick O'Reilly
Associate Director

Witness Protection

I have written before about litigation in times of Covid and shown that the administration of justice continues in these difficult times, at least in the Business and Property Courts. An interesting body of case law is developing as part and parcel of coping with the circumstances in which we all find ourselves. Two recent, important cases give the flavour of those developments.

The first is the decision of the Court of Appeal in Re A (Children) [2020] EWCA Civ 583, a family law case but which is of general significance, in which the court, whilst recognising that the decision whether to proceed with a remote hearing will vary from case to case, identified some relevant considerations:

1. The importance and nature of the issue to be determined;
2. Whether the hearing was going to result in an interim or final order;
3. Whether the case was urgent or a decision could wait;
4. Whether the parties were legally represented;
5. The ability of any lay party to deal with remote proceedings meaningfully: his/her access to and familiarity with the necessary technology, funding, intelligence/personality, language, ability to instruct lawyers (both before and during the hearing) and so on;
6. Whether oral evidence was to be heard or whether the case would proceed on the basis of submissions only;
7. The nature of the evidence to be adduced and assimilated;
8. The scope and length of the proposed hearing;
9. The technology available: telephone or video, and if video, which platform was to be used (a telephone hearing being generally less effective than one using video);
10. The experience and confidence of the court and those appearing before it in the conduct of remote hearings;
11. Any Covid-safe alternatives that may be available for some or all of the participants to take part in the hearing by physical attendance.

The second is Bilta (UK) Ltd & Ors v SVS Securities Plc & Ors [2021] EWHC 36 (Ch), a case about dishonest assistance, where Marcus Smith J was confronted with a difficult decision whether or not to adjourn for the second time a witness trial to the resolution of the issues in which the honesty or otherwise of certain witnesses was likely to be an important factor.

The judge decided the trial should go ahead as a hybrid trial (partly heard remotely, partly with attendance of witnesses), but subject to something like 20 directions designed to balance fairness on the one hand against the protection of the witnesses (and other participants) on the other. They included provision for the exclusive use of a ‘super court’ in the Rolls Building, adjusted sitting times and timetabling, restrictions on the number of people in court at any one time and even arrangements for transport and parking.

As every lawyer will know, and as Marcus Smith J reminded himself, “[T]he general rule is that oral evidence given under cross-examination is the gold standard because it reflects the long-established common law consensus that the best way of assessing the reliability of evidence is by confronting the witness” (R (Dutta) v GMC). The judge’s creative and pragmatic approach recognised and applied that principle in the best way possible in the circumstances in which the courts are operating. He, and the many other judges who are faced with difficult decisions about how proceedings should be conducted, are to be commended for doing what they can to keep the administration of justice on the road whilst minimising the compromise to standards that the current situation makes inevitable.

For what it is worth, my personal experience of conducting just one witness trial remotely was positive, but it was only two days and even then, more wearing than a live hearing. Like most judges I have spoken to, I eagerly await a return to the gold standard.

Dr. Stephen Baister
Non-Executive Director