Preferential Payment Solicitors
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Our experienced insolvency law solicitors are here to protect your company from the devastating consequences of preferential payments. If your company is facing financial difficulties, the temptation to favour certain creditors can arise. Any preferential payment can have severe legal consequences, jeopardising both your company's financial stability and the personal liability of you as its director.
With our expert guidance and representation, you can safeguard your financial stability and minimise personal liability.
Was Your Payment Preferential?
Have you favoured payments to related parties, secured creditors or prioritised larger payments to single creditors? If so, your payments might be considered preferential.
Common reasons for preferential payments include:
- Favouring related parties or friends and family
- Prioritising secured creditors to protect personal assets
- Paying larger amounts to single creditors
The Insolvency Act 1986 sets out the legal framework for preferential payments. If your company becomes insolvent, transactions made within a specified period before insolvency can be challenged as preferential, potentially resulting in significant financial penalties.
If in doubt, we are here to help. Get in touch with our solicitors to arrange your FREE, no-obligation initial consultation today.
The Consequences of Non-Defense
Failing to defend a preferential payment claim can have catastrophic consequences, including:
- Personal Liability for Directors
- Repayment of the Preferential Payment by the creditor
- Increased Scrutiny of Your Company's Financial Affairs in Liquidation
How We Can Help
Our team of expert preferential payment solicitors can be your trusted partner in navigating the complexities of preferential payment law. We offer a comprehensive range of services designed to protect your interests and minimise financial risks, including:
- Vigorous Legal Representation: Our skilled lawyers will fight tirelessly to defend your rights in court proceedings.
- Strategic Settlement Negotiations: We'll work to achieve favourable settlements, potentially avoiding lengthy and costly litigation.
- Proactive Advice: Our team will provide expert guidance on best practices to help you avoid preferential payment issues in the future.
Understanding Your Costs
We believe in transparency and open communication. That's why we're committed to providing you with a clear understanding of the potential costs associated with your preferential payment case.
Fee Structures
We offer a variety of fee structures to accommodate different circumstances and budgets:
- Fixed Fees: For certain cases, we can provide a fixed fee estimate, giving you a clear understanding of the total cost upfront.
- Hourly Rates: In other cases, we may charge an hourly rate, allowing for flexibility as the case progresses.
- Contingency Fees: For eligible cases, we may offer a contingency fee arrangement, where you only pay a fee if we successfully recover compensation for you.
Potential Additional Costs
While we strive to minimise costs, there may be additional expenses that arise during the legal process, such as:
- Court Fees
- Expert Witness Fees
- Disbursements (e.g. court fees, barrister costs)
We will discuss these potential costs with you upfront and explore options to help you manage them effectively.
What You Need to Know
Instructing our experienced insolvency solicitors means you will benefit from our firm’s customer-focused approach.
We are proud of our
- Clear Communication: We'll provide regular updates on the progress of your case, potential costs, and timelines.
- Customised Strategy: Our team will develop a tailored approach based on the specific details of your case.
- Risk Assessment: We'll discuss the potential risks and benefits of different strategies without the legal jargon.
- Confidentiality: Your personal and financial information will be treated with the utmost confidentiality and in line with current GDPR policy.
- Alternative Dispute Resolution: We'll explore and advise you on ADR options if these are appropriate to your case.
Why Choose Us
Our team of seasoned insolvency solicitors has decades of experience handling complex preferential payment cases. We understand the serious financial and reputational risks involved, and we're committed to providing the highest level of legal representation to protect your interests. When your company is facing financial challenges, it's essential to have a trusted legal partner who can guide you through the complexities of preferential payment law.
With us, you will benefit from:
- Decades of Experience: Our team boasts extensive experience in handling complex insolvency cases, including preferential payments.
- Proven Track Record: We have a history of successfully representing clients in challenging legal matters.
- Highly Regarded: Our commercial litigation specialists are recognised for their expertise by industry experts.
- Top-Tier Guidance: Benefit from the insight and guidance of leading professionals in the field.
- Plain-English Explanations: We avoid legal jargon and communicate in a way that's easy to understand.
- Client-Centric Approach: Your needs and concerns are our top priority.
- Alternative Options: We explore ADR options when appropriate to help you resolve disputes efficiently and cost-effectively.
- Tailored Solutions: Our strategies are designed to align with your specific business goals and objectives.
- No-Obligation Consultation: Schedule a free initial consultation to discuss your case.
- Convenient Locations: We have offices in Birmingham, London, and Northampton for your convenience.
Take Action Today
Don't let preferential payment claims jeopardise your business. Contact our team for a free consultation, and let us help you protect your interests.
FAQ
What is a preferential payment?
A preferential payment occurs when a company in financial difficulty pays one creditor more favourably than others, often to protect their interests or those of associated parties. This practice can have severe legal consequences, particularly if the company subsequently becomes insolvent.
What is the preferential payment clause?
The preferential payment clause is a legal provision found in the Insolvency Act 1986. It outlines the circumstances under which payments made by a company in financial difficulty can be challenged as preferential. If a payment is deemed preferential, it may be recovered by the liquidator or administrator for the benefit of the company's creditors.
What are the defences to preferential payments?
There are limited defences available to companies and individuals accused of making preferential payments. These defences typically involve demonstrating that the payment was made in good faith and without knowledge of the company's insolvency.
What is a preference payment in insolvency?
A preference payment in insolvency refers to a transaction where a company in financial distress prioritises one creditor over others, potentially giving them an unfair advantage. If a preferential payment is identified, it may be challenged by the liquidator or administrator, leading to potential legal consequences for the company and its directors.
Qarrar Somji
Solicitor-Advocate
Qarrar qualified as a Solicitor Advocate in 2014 having previously had experience in a varying range of litigation roles.
