Time limits to serve Insolvency Act 1986 proceedings (Bell & Anor v Ide & Ors)

Time limits to serve Insolvency Act 1986 proceedings (Bell & Anor v Ide & Ors)

This case deals with the interaction between the CPR and the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, when dealing with service of proceedings. In short, it decides that as long as proceedings are issued within the limitation period and served more than 14 days before the first hearing (whenever that takes place), they are validly served, even if service occurs more than four months after issue. The court held that the judgments in Re Kelcrown Homes Limited and Re HS Works Limited were wrongly decided and did not follow them. Permission has been given for an appeal to the Court of Appeal. Written by Steven Fennell, barrister, Exchange Chambers, and Karen Unsworth, director, Hewlett Swanson.

Bell & Anor v Ide & Ors [2020] EWHC 230 (Ch) (12 February 2020)

What are the practical implications of this case?

HHJ Paul Matthews’ decision confirms that where proceedings are issued within the limitation period and served at least 14 days before the first effective hearing, the court will not create a limitation defence where none would otherwise exist.

The court still has a discretion to refuse to vary the date of the first hearing and is unlikely to allow unreasonably long delays, or any delay at all where there is no good reason for it.

If the decision is upheld on appeal, it will mean that an applicant who issues within the limitation period will not face the risk of a limitation defence where the first hearing is adjourned for reasonable and proper case management reasons.

What was the background?

The applicants issued proceedings under the Insolvency Act 1986 (IA 1986) in January 2019, shortly before the sixth anniversary of the facts giving rise to the claim. For the purposes of the hearing, it was accepted that there was an arguable case that the primary limitation period was six years.

The procedure for claims issued under IA 1986 i

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About the author:

Zahra started working as a paralegal at Lexis Nexis in Banking and Insolvency teams in April 2019. Zahra graduated with a 2.1 honours in a BA French and Spanish, completed the GDL at BPP University and is seeking some experience before commencing the LPC. She has undertaken voluntary work for law firms in London, Argentina and Colombia.