Top tips on the use of office-holders’ investigative powers


The Insolvency Act 1986 [1] offers some invaluable tools to compel relevant parties to produce information and documentation to insolvency office-holders.

Two recent cases, both favourable to office-holders, have further developed the guidance in this area [2] and provide a timely reminder of key issues to consider on the exercise of office-holder powers.

1. Unless there are compelling reasons for failing to do so office-holders should write to a party seeking voluntary provision of information or documentation before resorting to an application to Court.

2. Office-holders must be able to clearly explain the need for and reasonableness of their requests. The Court will give great weight to the office-holder’s discretion if they do apply to Court. However, office-holders should be aware of the burden which may be placed on third parties and be able to show that they have sought to lessen that burden so far as reasonably possible.

3. The balance of convenience between the parties will be a crucial factor, especially where third parties and competing interests of confidentiality apply. The office-holder typically has in their favour that they were formerly a stranger to the party over whom they are appointed and that the request is because of a shortage in the available books and records.

4. Requests should be clear and particularised. This will not only help with any eventual application to Court, but will also help identify any partial or misleading responses received from respondents. For applications to Court, documentation and information sought should be separately particularised and information should be sought under the terms of IA86, in accordance with the applicable provisions of the Insolvency Act 1986 (i.e. by requests for further information, oral examination before the Court or witness statement).

5. Contemplation or even prior issue of proceedings is not an absolute bar to the use of office-holder’s powers. However, it will weigh in the balance of convenience. Where possible, office-holders should make enquiries at an early stage and in accordance with an office-holder’s general duty to progress cases.

6. Confidentiality may not be a determinative factor for the Court in settling any application. However, it may require provision of notice to relevant third parties and will often provide a legitimate basis for professional respondents refusing to produce information or documentation without a Court order.

7. Privilege may prevent the production of information or documentation. However, the Court retains discretion, provided a strong apparent case can be made out to justify investigation. Office-holders should also be alive for cases of potential joint privilege or common interest privilege. This may apply where advice has been provided by advisers acting simultaneously for multiple parties such as group companies or spouses. Case law has restricted privilege to classic solicitor-client relationships and it may not apply to communications by in-house lawyers or other professionals such as tax advisers.

8. The Court will generally not award costs against the respondent to an application. However, the Court retains discretion, particularly where a respondent has unreasonably refused an office-holder’s request before going to Court. Where there is potentially a high volume of relevant documentation and the respondent refuses to co-operate with an applicant to narrow a request, this may encourage the Court to award costs against them.

9. Recent case law suggests the professional costs of respondents will not be recoverable (such as solicitor’s time-costs for responding).

10. The rights of certain parties to retain relevant documentation (such as unpaid professionals) may not be enforceable against an appointed office-holder.

11. Where the office-holder is appointed by Court, there will be a public duty for a respondent to co-operate and an unreasonable refusal to do so may amount to contempt of Court.

This post was edited by James Baty. For more information, email

[1] Sections 234 to 236 Insolvency Act 1986 (and for bankruptcy Section 366) (IA86)

[2] Re: Comet Group Limited [2014] EWHC 3477 (CH) and Re: Harvest Finance Limited [2014] All ER (D216) (DEC)

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.