Insolvency—administration—personal costs liability of administrator—Insolvency Rules 2016, Rules 14.8 and 14.9

Chief Insolvency and Companies Court (ICC) Judge Briggs has refused to order that an administrator should be personally liable to pay the costs of a creditor’s successful application against the rejection of its proof of debt under Rule 14.8 of the Insolvency Rules 2016 (IR 2016), SI 2016/1024. Given the limited caselaw to date, the judgment now provides valuable guidance as to the circumstances in which the court should depart from the default rule in IR 2016, r 14.9 that the office holder is not liable to pay costs unless the court ‘orders otherwise’. Insolvency practitioners will be reassured by the court’s affirmation that since the office holder is acting in a neutral, quasi-judicial capacity, her or she will not be deprived of the ability to recoup their costs from the insolvent estate without ‘special circumstances’ or ‘good reason’. Creditors should also be aware that even where their appeal is successful, the costs are likely to come out of the insolvent estate and reduce the assets available for distribution. Written by Zoe O’Sullivan QC, barrister at Serle Court Chambers.