A solicitor appealed against an order requiring him to contribute to the costs of Mareva injunction applied for on behalf of his bankrupt client.
Held: Solicitors were not liable in costs personally for starting proceedings on behalf of a bankrupt. A bankrupt has power to instruct solicitor to commence proceedings. Waller LJ
Gibson LJ said: ‘s.306 of the Insolvency Act 1986 . . vested in the trustee in bankruptcy property such as the bankrupt’s claimed interest in [the subject matter of that claim] on the bankruptcy . . the question to be answered is whether the bankrupt had capacity to retain a solicitor to commence the proceedings which he did commence. These proceedings are not a nullity such as would have been the case if the plaintiff did not exist. But they were liable to be stayed or struck out because the bankrupt did not have any interest in the property, such interest as he did have prior to the bankruptcy order having vested in the trustee in bankruptcy. They might be stayed pending the decision of the trustee in bankruptcy to take over the proceedings. Alternatively, if the trustee did not wish to do so, a defendant could apply to strike out the action’.
Waller LJ said: ‘if the solicitor commences an action for a bankrupt in relation to a cause of action which is vested in the bankrupt’s trustee, there will on most occasions be negligence bringing into play the jurisdiction which does not depend on an analogy with breach of warranty of authority’.
Gibson LJ, Waller LJ
Gazette 15-Jan-1997, Times 08-Jan-1997,  EWCA Civ 1140,  1 WLR 233,  1 All ER 979
Insolvency Act 1986 306
England and Wales
Cited – Myers v Elman HL 1939
The solicitor had successfully appealed against an order for a contribution to the other party’s legal costs, after his clerk had filed statements in court which he knew to be misleading. The solicitor’s appeal had been successful.
Held: The . .
Cited – Thames Chambers Solicitors v Miah QBD 16-May-2013
The solicitors appealed against a wasted costs order. They had accepted instructions to act for a bankrupt in pursuing a debt before his discharge and without the debt having been assigned to him by the trustee in bankruptcy.
Held: The order . .
Cited – Pickthall and Another v Hill Dickinson Llp CA 11-Jun-2009
The court was asked as to the extent to which it is an abuse of the process for a claimant to commence proceedings without having the relevant cause of action vested in him, and whether it would be right to allow him to amend his pleadings to plead . .
These lists may be incomplete.
Updated: 19 April 2021; Ref: scu.141008