Comet, Confidentiality and Regulatory Intervention

Comet, Confidentiality and Regulatory Intervention

Comet, Confidentiality and Regulatory Intervention

Comet, Confidentiality and Regulatory Intervention. Readers of the intriguing judgment in the case of Lambert Carton-Kelly v Edwards [2020] EWHC 131 (Ch) will not need to work under Stakhanovite conditions to get through it expeditiously. Unlike many judgments dished out by the Court, the conclusion is before your eyes when you train your sights on paragraph number 47. There is no paragraph 48. Quotations referred to below are extracts from the aforesaid Judgment. This case involved a mix of insolvency, confidentiality and regulatory intervention.

Anyone however eager to get right down to brass tacks may be pleased to note that the proposition that ‘sunlight is the best of disinfectants’ seems to have prevailed. The principle of open justice is alive, well and it seems kicking. Deputy Insolvency and Companies Court Judge Frith (“Judge Frith”) appears to have lifted the following confidentiality restrictions (“the Confidentiality Regime”) previously in place:

The Liquidators decided that certain proceedings they had issued ought to be discontinued and sought Court directions. It appears that the ICAEW disagreed (“It was at that stage that the ICAEW intervened on the grounds that they opposed the course of action that the Liquidators were proposing.”), culiminating in two judgments in June 2018 (“the June Judgments”).

The second of the June Judgments appears to have sparked the Confidentiality Regime to which Judge Frith had to recently consider.

The first of the June Judgments interestingly enough brought another Liquidator to the table (“the Additional Liquidator”) to investigate and “if so advised” prosecute “the causes of action with regard to the sale of the shares in the Company to HAL…”. The Additional Liquidator issued some proceedings and such matters appear to have settled on 8 November 2019.

The Application as to the lifting of the Confidentiality Regime came before Judge Frith with other parties such as the ICAEW and the Insolvency Service (“IS”) provided with notice of the same.

They appear to have expressed their views on the lifting of the Confidentiality Regime:

It seems that the IS suggested the redaction sought should be maintained because of the way in which certain information had been obtained using powers conferred on the Secretary of State in relation to an investigation.

The incurious mind might have noted a somewhat interesting feature that sprouted ie. that notwithstanding the proposition put forward by the IS about disclosure; it was “common ground that the IS disclosed information it obtained as a result using the powers conferred upon it by Section 447 to the ICAEW. They in turn used it in connection with their intervention in the application made before the Learned Judge.“.

Judge Frith went onto comment about the IS’s disclosure to the ICAEW as follows: It was not explained to me upon what basis the IS disclosed the information to the ICAEW, but the fact is that they did.

The Court concluded that the cardinal principle of open justice was vital to the “integrity of the judicial systemand the introduction of confidence in the judicial system in the context of holding it to account.”.

Now the June Judgments are awaited … for more on “Comet, Confidentiality and Regulatory Intervention”

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