A ‘NO deal’ Brexit will seriously hit Cumbrian fraud victims trying to recover debts from insolvent companies, an expert has warned.

Paul Barber, North West chairman of the insolvency and restructuring trade body R3, said leaving Europe without a deal could impact on firms seeking to retrieve assets.

It would also be more difficult to rescue companies with a presence in multiple EU countries, which could threaten jobs.

Mr Barber said: “At the moment, UK insolvency and restructuring procedures and judgments are automatically recognised across the EU and vice versa, so it’s relatively quick and cost-effective to retrieve assets within the EU, and insolvencies of pan-European companies can be dealt with by one procedure.

“Without this framework, it will become much more expensive and difficult to resolve cross-border cases.

“This would jeopardise creditor returns, businesses, jobs and investment, and damage the UK’s reputation as a place to do business.”

He said in some cases, people moved money or bought property overseas before becoming insolvent.

“A recent case involved a bankrupt person who owed significant sums to UK creditors but had money in a Spanish bank and a house in Spain,” he said.

“Under the current rules, notice of bankruptcy can be registered at the Spanish land registry to stop unauthorised dealings in a property, and it is easier for UK-based creditors to pursue claims.

“The loss of automatic recognition of UK court rulings in the EU would have made it much more difficult to have the court’s bankruptcy ruling recognised.

“This makes the process of tracing and recovering Spanish-based assets slower, less certain and more expensive for creditors.”

He added that ‘no deal’ would also damage investors’ confidence in UK businesses with a presence in the EU.

“A ‘no deal’ Brexit would be bad for businesses and creditors alike in insolvency cases,” he said.

“The Government has repeatedly outlined a desire to seek a post-Brexit agreement which closely reflects the principles of mutual cooperation that exist under the current EU framework.

“This is welcome and R3 is happy to support the Government’s pursuit of its objective.”