Insolvency/restructuring

Insolvency/restructuring

Rebecca Lloyd

XXIV Old Buildings

University: University of Oxford
Degree: History
 

It is unlawful for a business to trade unless it has the means to meet its outstanding liabilities. If it finds itself in this situation, it may take one of several courses of action: reaching a voluntary arrangement with its creditors; restructuring its liabilities and assets; having its affairs temporarily managed by a third-party professional acting as an administrator; or entering into formal liquidation, which sees a professional third party taking control and winding up the company according to an established court-based process. Many parties become involved in situations of insolvency, some with their own legal advisers, others sharing advisers. This is a familiar world for barristers, most of whom will recall spending their very earliest days in practice attending 'winding up' hearings. Some of the biggest insolvencies have billions of pounds at stake, so from time to time there will be lucrative work for even the most senior QCs.


After graduating with an art history degree from the University of Oxford, Rebecca Lloyd briefly considered a career in the solicitors’ profession before opting to join the Bar. "Reading about the lifestyle and specialised role of barristers won me over," she explains. "I wanted to advocate and be afforded the time to really sit and think about legal issues and cases, which I think solicitors don’t often have – as their role involves taking more of a managerial role in each case."

The postgraduate conversion courses were followed by the successful commencement of pupillage at XXIV Old Buildings in 2012, which provided Rebecca with a highly challenging, but supportive environment in which to continue her development. "I had the opportunity to shadow barristers of 10 to 15 years’ call, observing how they work and gaining exposure to the kind of high-quality cases undertaken by such experienced advocates," she explains. "The learning curve was steep and my skills were really challenged and stretched, but I also benefitted from excellent feedback and support. I liked the fact that there is no formal assessment at XXIV Old Buildings and that regular, ongoing feedback is the preferred option." With her pupillage completed and tenancy attained, Rebecca set about building a thriving practice in the area of insolvency and restructuring.

Insolvency and restructuring cases are a constant feature of the chancery Bar, and the varied and interesting kinds of litigation that can result from them mean that they are especially ideal for junior barristers establishing their practices and building up their experience. "Some claims may not even be based on the insolvency itself," Rebecca explains. "An insolvency can instead create the ideal opportunity for parties to look back at all the actions of the company and determine where there are any claims to be made, for example, related to a contractual or negligence matter. This area is therefore good for a junior barrister because there are lots of small cases which end up in court. Hundreds of short petitions are made to the winding-up court on a weekly basis and these are the kind of cases that would go to barristers of my call. All sorts of applications accompany a given insolvency, such as for the appointment of an administrator or the approval of a scheme of arrangement, which provide good opportunities to get some advocacy experience."

The variety of cases which result from insolvencies and restructurings form a key component of junior barristers’ practices as they establish themselves at the chancery Bar. "At my level, I usually handle small applications rather than take on the whole insolvency," says Rebecca. "In such cases I receive the instructions telling me when I need to appear in court and then look up the procedure and the relevant law. I then talk to the solicitor to make sure that I am happy that my side has done everything that needs to be done before conducting the advocacy in court. The process is usually quite simple, but small cases in other areas of law that might turn into a trial at some point require me to do more case management, keeping in regular contact with the solicitor as negotiations are conducted with the other side and drafting correspondence."

In addition to a relative abundance of smaller matters, Rebecca is also able to take roles in teams of barristers assigned to much larger cases. "On such cases the team is led by a Silk – a QC – and the tasks get divided among the team, so I could be researching points of law, drafting witness statements or drafting a certain part of the skeleton argument," she explains. "I also enjoy the more team-based nature of these cases, where my fellow barristers and I discuss strategy and share ideas."

A particular highlight of Rebecca’s time in practice so far has been her recent secondment to the Financial Conduct Authority (FCA), where she was involved in the administration of MF Global. "It was a very high-value case involving interesting aspects of regulatory law," she explains. "I was tasked with formulating a new FCA rule which would enable MF Global’s administrators to deal with some assets which were otherwise going to be of no benefit to anyone. Eventually I came up with a rule which everyone was happy with and which went before the judge in the case, who approved the rule’s use – it was really nice to see something which I had put my mind to come to fruition and result in practical benefit for those involved."

The frequency of high-value cases makes the work very interesting. "It means that there is the money to conduct cases and argue points very thoroughly, and make new law if required," explains Rebecca. "It is also exciting to be so involved in what goes on in the global economy and the finance sector. For example, the global financial crisis had a big impact on the insolvency world, while the Bernie Madoff Ponzi scheme which hit the news when he was arrested in 2008 is still leading to litigation which I am involved in now. Indeed, the global financial crisis in 2008 led to a lot of big-ticket litigation which is now coming to an end as a result of the limitation period. This means that there is a reduction in work resulting from the financial crisis, but because insolvency is such an international practice area, any economic fluctuation may result in insolvencies in countries where my expertise in English law will be useful. Many jurisdictions around the world look to English law and lots of companies register in these jurisdictions. For example, a large Chinese company may be registered in the Cayman Islands, where I am able to work, so even if the matter is largely based in China, my expertise will still be relevant. There are always going to be companies becoming insolvent, so although there will be a reduction in cases resulting from the financial crisis, I don’t envisage insolvency barristers struggling to find work in the future."

If there is a negative aspect to the job, it is the potentially stressful unpredictability of the workload. "This is fantastic on the one hand because it means that it is never boring, but it can also mean that making plans is sometimes a futile exercise," says Rebecca. "There are times when I say yes to too many things and then struggle to get all the work done on time without compromising on quality, while at other times hearings are cancelled at the last minute, which presents its own difficulties."

If you are considering starting a career in this area of law, it will be crucial to develop your understanding of how businesses work. "Attention to detail and curiosity are crucial traits – it is very important to have a desire to really understand the mechanics of what you are reading about," explains Rebecca. "You have to really understand how a company which needs restructuring or has gone insolvent works, and what it did day to day, in order to understand the types of claim that will arise out of it. You also need a good head for figures, which can often seem really difficult in these cases, but are actually simpler than they initially seem."

Finally, Rebecca advises anyone aspiring to join the chancery Bar to leave their TV-inspired preconceptions of what arguing in court is like at the door: "You need to be confident in your ability to present, but a penchant for drama is not useful in this area of law – it’s about being straight and comprehensible."