Q&As

Can a professional negligence claim be brought against a discharged bankrupt (B) or their estate where the alleged negligence relates to the period prior to the making of B's bankruptcy order?

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Produced in partnership with Eleanor Stephens
Published on LexisPSL on 29/01/2020

The following Restructuring & Insolvency Q&A produced in partnership with Eleanor Stephens provides comprehensive and up to date legal information covering:

  • Can a professional negligence claim be brought against a discharged bankrupt (B) or their estate where the alleged negligence relates to the period prior to the making of B's bankruptcy order?

Can a professional negligence claim be brought against a discharged bankrupt (B) or their estate where the alleged negligence relates to the period prior to the making of B's bankruptcy order?

The making of a bankruptcy order has the effect of freeing the debtor from the debts they owe to their creditors (save for some statutory exceptions) and prevents unsecured creditors from commencing, or continuing with, any legal process against the bankrupt or their property. Therefore, at the core of the bankruptcy regime is the idea that in return for surrendering their estate for the benefit of their creditors and accepting the disqualifications which are inherent to the status of a bankrupt, the bankrupt should be protected against and relieved from the claims of their creditors. Specifically no creditor with a provable debt in the bankruptcy has any remedy against the property or person of the bankrupt in respect of that debt; subject to certain restricted exceptions in respect of executions and distress, such a creditor may instead prove in the bankruptcy.

Removing the creditor's right to seize the property or person of the bankrupt does not, by itself, affect the existence of the creditor's claim or the possibility of the creditor bringing proceedings in respect of that claim. During the bankruptcy, the bankrupt is protected to the extent that no claims may be brought by

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