Overview Legal Fees In Liquidation

The default position is that legal fees in Liquidation are subject to detailed assessment.

A Liquidator however can and more often than not will pay the legal fees of the insolvent estate’s own solicitors by way of agreement.

Default Detailed Assessment Provision

The default detailed assessment provisions set out in the Insolvency (England and Wales) Rules 2016 are as follows:

Hellas Telecommunications (Luxembourg) II SCA v Slaughter and May

The case of Hellas Telecommunications (Luxembourg) II SCA v Slaughter and May [2016] EWCA Civ 474 (“Hellas“) highlighted the matter further after Hellas Telecommunications (Luxembourg) II SCA (“the Company”) had gone into Administration and subsequently appointed Liquidators wanted to explore the detailed assessment of the fees of Slaughter and May (“Slaughter”) charged in the Administration of the Company.

In Hellas, the Court of Appeal said that whilst it might be possible for the Liquidators conceivably look to challenge the fees of Slaughter as misfeasance but they could not seek detailed assessment. There were a number of reasons but amongst other things, the fees of Slaughter had been already agreed:

I reject Mr Davies’ submission that the liquidators can fasten on to IR 7.34(3) (or indeed IR 7.34(2)) to seek a detailed assessment of the legal fees which administrators have agreed to pay. I add that I am not unhappy to reach that conclusion since it seems to me to be contrary to principle that the liquidators should be able to reopen contractual arrangements whether or not they have been properly made.

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