Insolvency experts have warned that Government legal reforms could cost creditors more than £160m per year.

The Southern Committee of R3 is backing a call for the Government to scrap the planned change which is set to happen in April next year.

The change will see insolvency litigation no longer be-ing exempt from the crack-down on ‘no win, no fee’ leg-al funding, which was intro-duced in the 2012 Legal Aid, Sentencing and Punishment of Offenders Act.

Chairman of the committee and a director at Quantuma in Southampton, And-rew Watling, said: “These changes are anti-business, will increase tax avoidance and evasion and will benefit directors of insolvent comp-anies who have committed fraud or behaved recklessly.

“Many insolvencies affect creditors who do not have the resources to provide funding to pursue cases where they have lost money.”