Two solicitors had been made bankrupt and then discharged from bankruptcy. They suffered adjudications by the SDT awarding compensation for matters occurring before the bankruptcies. They appealed, saying that the awards were bankruptcy debts from which they were discharged. The Law Society submitted that the adjudicators’ awards were discretionary, that no debt or liability arose until the awards were made, and that the sums awarded were not bankruptcy debts.
Held: The solicitors’ appeals failed. The case law established a consistent principle of general application that where a court or tribunal has a discretion whether or not to make an award, any sum awarded in the exercise of that discretion does not exist as a debt or liability until the award is made. The making of the complaint created a risk, not a liability.
Richards LJ, Maddison J
[2009] EWHC 1943 (Admin), [2010] BPIR 49
Bailii
Solicitors Act 1974, Insolvency Act 1986 281(1) 382(1)
England and Wales
Citing:
Cited – Glenister v Rowe CA 21-Apr-1999
The claimant sued for breach of trust. The action was re-instated after being struck out for want of prosecution, but in the meantime the defendant had been made bankrupt and then discharged from bankruptcy. An order for costs was then made which . .
Cited – Steele, Regina (on the Application of) v Birmingham City Council and The Secretary of State for Work and Pensions CA 16-Dec-2005
The claimant had received an overpayment of benefits (Job seeker’s allowance), but then was made bankrupt. He now said that this was a debt in the bankruptcy.
Held: It was not. At the date of the bankruptcy order, the possible reclaim was not . .
Cited – Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine CA 11-Jun-2008
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act . .
Cited – Day v Haine and Another ChD 19-Oct-2007
The liquidator sought directions from the court after former employees of the company submitted proofs of debt in respect of protective awards made for the company’s failure to consult on their redundancy before going into liquidation.
Held: . .
Cited – Susie Radin Ltd v GMB and others CA 20-Feb-2004
The company made redundancies but failed to carry out any effective or honest consultation. The tribunal awarded the maximum 90 days protective order. The company appealed saying that it had given the employees greater notice than was strictly due. . .
Cited by:
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Insolvency
Updated: 01 November 2021; Ref: scu.376215