Exploring a contractual duty to protect the interests of the bankrupt? (Reynard v Fox)

Exploring a contractual duty to protect the interests of the bankrupt? (Reynard v Fox)

Siward Atkins, barrister at Maitland Chambers (and counsel for the defendant) explores whether a trustee in bankruptcy (trustee) might owe duties to the bankrupt. He argues the message could not be clearer when it comes to the existence of a trustee’s contractual duty of care to the bankrupt—with this case suggesting a trustee cannot owe any contractual duties to protect the interests of the bankrupt.

Reynard v Fox [2018] EWHC 443 (Ch), [2018] All ER (D) 105 (Mar)

What are the practical implications of this case?

While in Oraki v Bramston [2017] EWCA Civ 403, [2017] All ER (D) 174 (May) the Court of Appeal left the door open to a suggestion that a trustee in bankruptcy might owe duties to a bankrupt at common law outside the misfeasance claim given to the bankrupt under section 304 of the Insolvency Act 1986 (IA 1986), in this case the bankrupt tried to push the door open a little further but failed spectacularly. Bankrupts will therefore receive little encouragement from Reynard v Fox on the duty of care owed to them by a trustee in bankruptcy. This case is a nail in the coffin on any suggestion that a trustee can owe contractual duties to protect the interests of the bankrupt. The circumstances would have to be exceptional (and very specific) for any such contract to arise.

What was the background?

The bankrupt (the claimant) made a claim against the former trustee in bankruptcy (the defendant) in connection with alleged breaches of duty owed by him.

The bankrupt first alleged that there was a contract between himself and his trustee under which the trustee w

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About the author:

Anna joined the Restructuring and Insolvency team at Lexis®PSL in August 2013 from Berwin Leighton Paisner where she was a senior associate in the Restructuring Team.

Anna has worked on a number of large scale restructurings primarily in the UK market acting on behalf of lending institutions.

Recent transactions include the restructuring of a UK hotel chain and the administration sale of part of the Connaught group. Anna has also spent time on secondment at The Royal Bank of Scotland and trained at Clifford Chance qualifying in 2007.