Revisiting fees agreed by administrators—Hosking and another (as joint liquidators of Hellas Telecommunications (Luxembourg) II SCA) v Slaughter and May

Revisiting fees agreed by administrators—Hosking and another (as joint liquidators of Hellas Telecommunications (Luxembourg) II SCA) v Slaughter and May

Can liquidators seek a detailed assessment of solicitors’ fees previously agreed by administrators? Hilary Stonefrost, barrister at South Square, explains the Court of Appeal’s decision in Hosking v Slaughter and May.

Original news

Hosking and another (as joint liquidators of Hellas Telecommunications (Luxembourg) II SCA) v Slaughter and May [2016] EWCA Civ 474, [2016] All ER (D) 173 (May)

The Court of Appeal, Civil Division, held that where a firm of solicitors providing legal services to a company in administration had agreed the amount of their fees with the administrators, subsequently appointed liquidators could not ask the Companies Court to direct that there be a detailed assessment of the amount of those costs under rule 7.34 of the Insolvency Rules 1986, SI 1986/1925 (IR 1986) or under the court’s inherent jurisdiction. That was the case whether the agreement had taken place before or after the end of the administration. If the liquidators did not agree with the fees that had been paid, they could bring misfeasance proceedings against the administrators.

What were the facts of the case?

After the company, Hellas, had gone into administration, the administrators instructed the solicitors firm Slaughter and May to act during the administration. The administrators agreed and paid 13 invoices rendered by Slaughter and May, the last one after Hellas had been put into liquidation.

The administrators sought the direction of the court as to whether Hellas should be dissolved or whether it should be put into liquidation. The court decided to wind up Hellas, and the Secretary of State appointed liquidators.

What is the history of the case?

The liquidators applied to a registrar for an order for detailed assessment of the 13 invoices. The registrar decided that, although IR 1986, r 7.34(1) and the other sub-clauses of that rule applied to administrations, on the proper construction of IR 1986, r 7.34, he had

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.