Overview Of The Difficulties of Section 236 Of The Insolvency Act 1986
Difficulties of Section 236 of the Insolvency Act 1986 arise because it is not some panacea to cure all of a Liquidator’s information deficiencies.
Its application in practice is capable of being misunderstood. Those who have made extensive use of the provision will know its deployment in a contested application is no simple matter.
It can be useful but there are many instances in which it has shortcomings. It is a power to apply for information; it is not a power of the right to receive.
Evidence Of Difficulties Of Deployment Of Section 236 Of The Insolvency Act 1986
The notable difficulties of Section 236 applications can be seen in cases such as:
Green v BDO Stoy Hayward LLP [2005] EWHC 2413 (Ch)
Green v Chubb and Jervis [2015] EWHC 221 (Ch)
Practical Difficulties Of Using Section 236
What you will find is that Directors who hand over some records can make a Section 236 application an uphill struggle for a Liquidator. Whereas a Director who hands over none (or almost no records) will often not have a leg to stand on.
However, insolvency investigation applications like those under Section 236 of the Insolvency Act 1986 may suffer from the notable disadvantage of all too often being desirable in respect of companies that have no assets. That causes funding problems for a Section 236 application which may mean it cannot be easily or readily deployed.
