Restructuring/Insolvency: Litigation: A London (Firms) Overview

Insolvency litigation has always been a specialist field, characterised by a close-knit community of professionals. The introduction of a dedicated section in Chambers & Partners is not just recognition of this, but a testament to the collective expertise within the community. The inclusion of 18 firms and 42 ranked lawyers already specialising in this area underscores the depth and quality of the professionals involved. This recognition does not even account for the extensive network of international lawyers, especially those in offshore jurisdictions, who form a significant part of our group. It is also essential to acknowledge the insolvency practitioners (IPs) we work closely with, both in the UK and abroad. Over the years, IPs have also become more specialised, with some focusing on litigation and others on transactional and restructuring matters.

One of the unique aspects of our field is the broad spectrum of issues we address. Unlike other practice areas, we are largely sector agnostic, applying insolvency principles across various business sectors. We wield special powers and uphold significant obligations for our clients, tackling issues that span multiple industries. Reflecting on recent history, we’ve seen notable failures that have led to prolonged litigation and court argument, such as Lehman Brothers, Stanford, Madoff, BHS, Patisserie Valerie, Carillion, NMC, Wirecard, and Arena Television just to name a few. These cases span a diverse range of sectors such as retail, hospitality, construction, healthcare, financial services and broadcasting. Despite their differences, many of them share a common theme: allegations of wrongdoing against those in control, leading to claims against management, professional advisers and other third parties.

Current global economic and political conditions suggest an impending rise in management misconduct and fraud. Business pressures remain high, while regulatory enforcement appears to be weakening globally. In the US, there is a noticeable pivot in regulatory agencies placing less emphasis on investigating and prosecuting corruption and white-collar crime. Similar trends are observed in other jurisdictions, indicating a potential increase in unethical behaviour, which will undoubtedly impact our work in the medium term. Our role in corporate governance is often underestimated, yet the investigative and redress work we undertake is crucial. We protect creditor rights and returns, and offer deterrents, all of which are fundamental to our corporate ecosystem, especially as we stand at a historical crossroads as tech, ethics and social norms find their place in a changing world.

So, what can we expect in the coming year? While predictions are challenging, several trends may emerge.

First, claims against professional services firms. Major collapses have often resulted in substantial claims against professional parties, primarily auditors and banks, but increasingly solicitors as well. Given their strict obligations, wide-ranging duties and deep pockets, professional parties will likely continue to be targeted. Ongoing claims and awaited court judgments may influence this trend too.

Second, restructuring plans have been a hot topic, with companies like Thames Water frequently in the headlines. This trend is expected to persist, with more companies potentially attempting to restructure their way out of difficulty. Maybe we will also see restructures to avoid significant litigation liabilities, which will be highly contentious.

Third, digital assets. The insolvency of entities like FTX and Three Arrows have dominated headlines, and even though they are not UK-based, we had a major crypto exchange winding up in England in 2025 with Lykke Corp UK Limited. More such cases are anticipated.

Fourth, AI. Whether or not there is a bubble, if it bursts, insolvency work will probably follow, leading to significant, unpredictable disputes. Additionally, AI is increasingly embedded in our processes and those of our clients, helping to spot suspicious patterns, flag potential reviewable transactions, and assist with merits analysis, cost forecasting and timelines. While some predict dystopian changes for our sector because of AI, others remain more optimistic. History shows that disruptors have often enabled healthy progression, and AI may fall more squarely into that category.

AI may also create new factual scenarios relevant to insolvency. We might see directors relying on flawed AI tools facing scrutiny for “blind reliance” or AI-generated documents raising questions about authenticity and verification. Automated decision systems could complicate traditional causation and loss assessments too. Consequently, new litigation claim types and targets may emerge, including the creators of automation tools.

All in all, 2026 and beyond will be a busy time for our community, and will present many interesting new challenges and opportunities.