[2025] EWHC 2316 (Ch)

Fecha: 10-Sep-2025

Further arguments

(d)

Further arguments

44.

Counsel for the Claimants argue further that their contention is supported by the following points:

Whether a person can waive performance of a statutory requirement, and whether a person bound by a statutory requirement can effectively contract out of complying with it, depends on legislative intention; Bennion, Bailey and Norbury on Statutory Interpretation (8th edition), at 9.6.

ii)

There is a well-established “general principle that parties cannot contract out of the insolvency legislation” (Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd [2012] 1 A.C. 383 at [1] (Lord Collins)).

iii)

It cannot have been the legislative intention that a prior decision of the directors or any resolution by members/creditors (that could be passed only by a majority) to limit the potential future liability of a liquidator, could operate to oust the jurisdiction of the court that is available under the legislation to all members and creditors.

45.

As to the argument that it might operate harshly on a liquidator to have unlimited liability in relation to his provision of services for which he may have charged only a small fraction of the value for which he might be held responsible, the Claimants argue that:

under the legislative and regulatory framework, all insolvency practitioners appointed as liquidators will necessarily have both professional indemnity insurance (or other appropriate arrangements in place to meet claims arising from being in public practice); and

ii)

where appropriate, a liquidator can guard against personal exposure by applying to the court for directions under s. 112 IA 1986. As noted by Maugham J in Home & Colonial at page 125, a liquidator owes a high standard of care because:

“He is of course paid for his services ; he is able to obtain wherever it is expedient the assistance of solicitors and counsel; and, which is a most important consideration, he is entitled, in every case of serious doubt or difficulty in relation to the performance of his statutory duties, to submit the matter to the Court, and to obtain its guidance”.

46.

The Claimants point out also that a liquidator will have provided a bond in the form required pursuant to section 390(3) IA 1986. Pursuant to the Insolvency Practitioners Regulations 2005, paragraph 12 and Schedule 2, such bond must contain provision whereby a surety undertakes to be jointly and severally liable for losses arising from the fraud or dishonesty of the insolvency practitioner up to an aggregate sum in respect of each appointment equal to at least the value of the assets at the date of appointment, up to a maximum of £5m.

47.

I do not see, however, how this last point advances their case: the bond is provided for the benefit of the members and creditors of the company in liquidation, not for the benefit of the liquidator, who remains jointly liable for his default. If anything, I see this point as weakening the case since it shows that the legislators were happy to see a limit afforded by the bond.