One thing this month has shown us is that the outlook for any business can fundamentally change within days and weeks.
It also means that news happens quickly and there can sometimes be a lot of it. This is why we collect all the important business and insolvency news stories from the week – every week – in one handy place.
There is also a lot of legal news that’s pertinent to the insolvency industry and vice versa, which is why we’re welcoming more solicitors into our readership.
We’re now launching a monthly News for Solicitors blog where we’re able to collate all the interesting news you might have missed in this fast-moving environment.
We’re always keen to hear what you think so please email us at ask@businessrescueexpert.co.uk because we really want to write only what you really want to read!
Witness coached via smart glasses while giving evidence
Another story that indicates that technology is far more embedded in society and the law than any of us may care to realise.
A judge has found that a claimant giving evidence in the High Court was being fed answers through a pair of smart glasses he was wearing.
ICC Judge Agnello said that she found Laimonas Jakstys “untruthful in denying his use of the smart glasses” but also that his evidence was “unreliable and untruthful” too. This extended to his witness statement, which the judge found to have been drafted by others.
The action brought by Mr Jakstys and his Lithuanian company UAB Business Enterprise on the Insolvency and Companies List was that they were the owners of Oneta Ltd and that the company’s register be rectified. Jakstys also sought reinstatement as a director of Oneta which had assets including a flat in London and land in Tonbridge, Kent.
The judge noticed that Jakstys “seemed to pause quite a bit” before answering questions. Counsel then told the judge that she could hear interference coming from around the witness and asked whether he might be wearing smart glasses.
His interpreter sitting next to him in the witness box confirmed that she could hear it too.
The judge noted in her ruling: “I asked him to remove them before continuing with his cross examination. After a few further questions, when the interpreter was in the process of translating a question, Mr Jakstys’ mobile phone started broadcasting out loud with the voice of someone talking.
“There was clearly someone on the mobile phone talking to Mr Jakstys. He then removed his mobile phone from his inner jacket pocket.”
He disputed this and argued that the glasses had not been linked to his phone and that the voice had been caused by ChatGPT. The judge found his explanation “lacked any credibility” and a photo of his phone screen showed multiple calls made during his evidence to a contact listed as “abra kadabra”.
He claimed this was a taxi driver he had been trying to reach to let them know he was at court and did not know what time he would finish. His evidence was rejected in its entirety, the defendants won and an indemnity costs order was made in their favour.
Legal V-Level to launch in 2028
The Department for Education (DfE) has said that a legal version of the government’s new V-Level vocational qualification, equivalent to one A-Level, will launch in 2028 and replace existing vocational qualifications such as BTECs.
Responding to the Post-16, Level 3 and Below Pathways consultation launched in October 2025, the DfE said V-Levels would have a “strong element of applied learning and include some practical assessment.”
Students who were “not yet ready or clear about specialising in one occupation” could study across more than one subject area. “Students will also be able to mix and match V-Levels and A-Levels where they want to have breadth across vocational and academic disciplines.”
The legal V-Level in 2028/29 will follow the launch of V-Levels in Education and Early Years; Digital and Finance and Accounting next year.
The DfE said T-Levels, which are equivalent to three A-Levels, would remain “the best option for young people who know what general career path they would like to follow, allowing a student to spend their full study programme immersing themselves in the more detailed curriculum for their chosen route.”
The legal T-Level, developed by the Chartered Institute of Legal Executives (CILEX) and training company Pearson, launched in September 2023 with 391 students currently enrolled in the first year of their legal T-Level.
Education secretary Bridget Phillipson said: “Our bold reforms will end the snobbery in post-16 education, supporting young people with real choice and real opportunity to build secure, future-proof careers. Not only that, but it will give parents much-needed confidence in a system that values every route to success – academic, technical or vocational – as we continue driving forward our mission to ensure that two-thirds of young people are in education, training or apprenticeships by 25.”
Rising AML breaches, complaints and investigations signal increasing scrutiny for law firms
Increased enforcement activity, compliance failures and complaints across the legal sector all add to a landscape of growing regulatory scrutiny this year.
The Solicitors Regulation Authority (SRA) has begun 2026 dealing with a series of high-profile issues affecting firms, including unexpected closures and regulatory interventions.
In one of the most significant developments in years, PM Law Ltd collapsed in February which required intervention measures to protect clients and manage the impact on ongoing legal matters.
The regulatory body also faced scrutiny itself. The Legal Services Board (LSB) issued a formal censure against the SRA over its handling of the collapse of SSB Law. This is only the second time the oversight regulator has formally censured a frontline legal regulator.
Anti-money laundering (AML) compliance has also emerged as another key area of concern. According to the SRA’s most recent report on the subject, almost one-third of law firms inspected were found to be non-compliant with AML requirements, while more than half were assessed as only partially compliant.
The regulator identified several recurring weaknesses across firms. These included inadequate client and matter risk assessments, inconsistent checks on the source of funds and internal AML policies that appeared robust in documentation but were not effectively implemented in practice.
As a result, the SRA has increased the number of AML investigations and enforcement actions. Firms operating in areas considered high risk such as conveyancing remain under particular scrutiny.
Regulatory attention has also focused on the consumer claims sector. The SRA has worked alongside the Financial Conduct Authority (FCA) to warn firms handling motor finance commission claims to strengthen procedures. Regulators are also concerned that some clients may be represented by multiple firms simultaneously or charged unreasonable termination fees when switching legal representatives.
Complaints against law firms have also increased year-on-year with data published by the Legal Ombudsman showing an annual 8% rise in new complaints accepted for investigation.
Among these, poor service findings were recorded in 70% of decisions while poor complaint handling was identified in 49%. The organisation has also highlighted delays linked to third parties as a common issue, although it emphasised that firms remain responsible for keeping clients informed and managing expectations throughout legal matters.
Meanwhile, the Ministry of Justice has opened a consultation on a proposed Interest on Lawyers’ Clients Accounts Scheme.
The proposal would divert a portion of interest earned on client accounts to the government, which could have financial and operational implications for law firms if implemented.
Taken together, the developments point to a year of heightened regulatory oversight for the sector with firms being expected to strengthen their compliance processes, improve communication with clients and ensure internal systems meet regulatory standards.
Foreign incorporated company allowed to voluntarily liquidate
The High Court has confirmed that a foreign-incorporated company whose centre of main interests is in England can move directly from administration into a creditors’ voluntary liquidation under paragraph 83 of Schedule B1 to the Insolvency Act 1986, even though the Act appears to prohibit voluntary winding up of overseas companies.
Esken Limited, a Guernsey company, entered administration in England in March 2024 after directors filed the requisite notice on the basis that the company’s centre of main interests was in England.
During the administration, the joint administrator realised substantially all of the company’s assets. The estate’s remaining tasks consisted largely of reviewing claims, distributing funds to creditors and winding down the corporate structure. Administrators opted to exit administration by invoking paragraph 83 of Schedule B1, which allows an administrator to file a notice converting the administration into a Creditors’ Voluntary Liquidation once secured creditors have been paid or provided for and a distribution to unsecured creditors is anticipated. The notice was filed in March 2025 and registered shortly afterward.
So what should have been a routine procedural step has instead raised a thorny statutory question.
Section 221 (4) of the Insolvency Act provides that an “unregistered company” cannot be wound up voluntarily except in accordance with the EU Insolvency Regulation, a framework that has shifted significantly since Brexit.
Esken falls outside the UKs domestic company register, raising the issue of whether the voluntary liquidation was legally permissible. Judge Burton concluded that the apparent conflict disappears once the statutory scheme is properly read. Section 221 sits within part V of the Insolvency Act, which governs the winding up of unregistered companies by the Court. By contrast, the paragraph 83 conversion mechanism forms part of the administration regime in Schedule B1 and operates independently of the Part V framework.
The Court held that paragraph 83 expressly applies to companies with their COMI in the UK, including those incorporated outside the EEA. Once the administrator files the notice and it’s registered, the statute automatically deems the company to be wound up as though a resolution for voluntary winding up had been passed.
On that basis, the conversion from administration to CVL didn’t require reconciliation with the restrictions in section 221(4). The liquidation arose by operation of the administration provisions themselves, rather than under the voluntary winding up regime for unregistered companies.
Glaisyers LLP unsecured creditors likely to receive nothing
Unsecured creditors owed money by closed Birmingham law firm Glaisyers LLP are not likely to receive a dividend from administrators.
Legal Aid specialists Glaisyers appointed administrators last summer as their remaining family and civil litigation work was transferred to other firms – Cartwright King and Davison’s Solicitors. The deal ensured that the majority of jobs were able to be saved.
The first administrators’ report from Opus Restructuring suggested a small payout may be found for unsecured creditors, as well as 15p in the pound for secured creditors. In the latest report published last week, that forecast has now been adjusted to zero for secondary preferential and unsecured creditors and is classed as uncertain for secured creditors.
The administrators had been able to recoup around £218,000 from work in progress and cash reserves but the administration has already cost almost £95,000 and further fees will be incurred. They also reported that £491,000 was due to owner and sole director David Simon and another individual. A shortfall in repayment of this debt was expected. HMRC were owed £139,000 and all unsecured creditors were owed a total of £681,000.
The firm was principally a legal aid care practice with child care work accounting for 85% of its legal aid caseload and employed 11 solicitors and had moved premises twice in recent years in an attempt to lower costs. Weekly payments from the Legal Aid Agency were insufficient to meet outgoings and cashflow was found to be consistently stretched with the firm relying on its bank overdraft and a loan of £120,000 both guaranteed by Simon.
Court upholds CVA deal between Petrofrac and creditors
A Scottish court upheld a Company Voluntary Arrangement (CVA) between Petrofac Ltd and its creditors in a blow to HMRC who sought to block the deal.
The CVA regards claims by certain creditors that would allow the energy engineering company, in administration since last year, to complete the sale of its Asset Solutions business to CB&I. The creditors voted for the CVA in January with 99% of creditors voting and 86% of the value of claims.
HMRC were among the creditors covered by the CVA and sought to block the CVA to enforce the government’s claim for historical National Insurance Contributions (NICs) for offshore workers from October 1999 to April 2014 that Petrofac disputed.
Following the ruling Petrofac insisted that: “The sale to CB&I represents the outcome of a lengthy market testing process and the administrators of Petrofac Ltd believe that the transaction is on the best possible terms that can be achieved for all creditors including HMRC. We have asked HMRC to confirm that they will not further challenge the CVA as ongoing appeals may further delay completion of the transaction.
“Petrofac is also seeking the support of both the UK and Scottish government to facilitate the swift completion of the sale to CB&I for the benefit of all stakeholders.”
HMRC responded that “we note the oral decision of the court and await the full judgement.”
A CVA is no escape from paying business rates
A recent High Court ruling has confirmed that a company cannot escape business rates on an empty shop just because it has entered into a Company Voluntary Arrangement (CVA) with its creditors.
Robinson Webster (Holdings) Limited (RWHL) operating under the “Jigsaw” fashion brand, entered into a CVA in August 2020 designed to rescue the business and rationalise its leasehold obligations.
Under the CVA, RWHL was to exit its shop at 44 Bow Lane in the City of London, handing back the keys and offering to surrender the lease. The freeholder, CBRE, chose not to accept the offer to surrender. The shop remained empty for three years and the City of London Corporation pursued RWHL for unpaid business rates totalling over £220,000.
The lower court ruled in RWHL’s favour, finding that it no longer had a real, practical ability to use the property and therefore should not be liable. The High Court disagreed and overturned that decision. The court held that the lease continued and RWHL remained entitled to exclusive possession of the premises.
The first important point to understand is that while a CVA can adjust what a company owes to its creditors, it cannot override a landlord’s proprietary rights including the right to refuse a lease surrender. Handing over the keys and offering to surrender the lease is not enough to transfer the rates burden to the landlord.
CVAs can vary enormously in their terms and circumstances, which is why Parliament has not granted business rates relief to companies in this position, unlike an administration or a liquidation.
This is a sharp reminder for firms in financial difficulties. Business rates liabilities on empty properties can continue to accumulate after a CVA is in place.
AI company lawyer boasts that AI will destroy the billable hour
Jeff Bleich, General Counsel of Anthropic, who makes the AI Claude, told the American Bar Association White Collar Crime Institute that “I don’t think the billable hour is the solution, and we’ve known it for a long time” last week.
Despite being a fixture of the legal profession for decades, the model has been under pressure for some time with clients increasingly pushing back against open-ended hourly charges in favour of more predictable fees structures.
Bleich, who was previously a partner and group CEO at Dentons before joining Anthropic, said that AI tools are eliminating the need for companies to hire lawyers to do what he described as “tedious” but lucrative work.
“Now we’ve got a technology that’s going to eliminate the sort of things that allow people to become wealthy off of tedious work. That was not what lawyers are trained to do, and not what we ultimately look to lawyers for.”
According to Bleich, the current model pits the interests of firms against those of their clients. Whilst the longer lawyers work on a matter, the more money they make, clients naturally want matters resolved as quickly as possible.
“The billable hour has created a wedge,” he said. “Clients want you to solve the problem as efficiently as possible and with as little drama as possible. And if you’re a company, the bigger the case gets, and the more dramatic it gets, and the more complicated it gets, and the more work that has to be done, the more lucrative it is.”
Bleich said he still values outside law firms, but wants them to find an alternative that works for everyone.
“We’re not going to sort of cheap out and starve you. On the other hand, you have to have an economic model that works. And the firms that adapt to that faster and better will be leapfrogging other firms, because they’ll be more attractive to work with.”