Should Pleadings Be Dropped From Insolvency Claims?

Should Pleadings Be Dropped From Insolvency Claims?

Should Pleadings Be Dropped from Insolvency Claims? By insolvency claims, this is intended to refer to insolvency office-holder claims.

The purpose of pleadings is to ensure that the opposing litigant knows the case they have to meet. However, could it really be said that litigants (especially those in receipt of professional legal advice from specialists permitted to practice in a reserved legal activity such as insolvency litigation), upon receipt of an office-holder’s Application setting out the statutory references as to the alleged conduct that an Applicant seeks to impugn and which articulates the consequential relief sought, really need to engage in speculation as to what case they are being asked to meet? As if the Application itself is insufficient, it will usually (one hopes!) not be all alone on the Court file but accompanied by a Witness Statement from the Applicant with the facts relied upon and presumably evidenced, along with the requisite new form Statement of Truth.

Why therefore should time, expense and delay sprout for Points of Claim and Point of Reply, to be yet another stage in such litigation?

Many office-holder claims have a set of hurdles for the office-holder to vault. The Insolvency Act 1986 typically has a schedule of criteria in many of the relevant sections to enable satisfaction of the office-holder claim. If you fancy for instance perambulating around Sections 238 and 239 of the Insolvency Act 1986 you will no doubt be enticed to move on to ‘relevant time’ in Section 240 of the Insolvency Act 1986 and then with alacrity onto the icing on the cake ie. the form of Order that you may seek.

Would such an exegesis stand up to examination if you trained your sights on some of those claims at the pinnacle of the Insolvency Act 1986? Well, how about we look at the Grandmaster of all office-holder claims, Section 214 of the Insolvency Act 1986. Yes, Wrongful Trading.

Whilst it might have been suggested by some that Wrongful Trading perhaps may not be entirely deserving of its fearsome reputation as a challenging office-holder claim and does not reasonably require the claimant to work under Stakhanovite conditions, at least to avoid having no reasonable prospect of avoiding its case being dismissed at the initial directions hearing. Nevertheless, conceivably it deserves respect and due diligence to get right. It can be an involved piece of litigation.

However, if one examines the way Section 214 is set out, again there are a series of steps to be fulfilled, including of course ‘every step‘. These are set out in the section that you need to be able to tick off in order to get it off the ground.

So with all these signposts guiding the litigants can pleadings be dropped from such insolvency litigation?

If you have an insolvency issue that you want advice on contact our CEO, Elliot Green on 020 3925 3613 or Contact Us for a Free Initial Consultation.

“Should Pleadings Be Dropped From Insolvency Claims?” is a post that is not legal advice and should not be relied upon as such. You should seek independent legal advice about the facts of your case. No liability is accepted by us for any reliance placed upon the same.