The process of disclaimer by a liquidator or trustee in bankruptcy under sections 178 or 315 of the Insolvency Act 1986
Produced in partnership with Robert Hantusch of Three Stone
The process of disclaimer by a liquidator or trustee in bankruptcy under sections 178 or 315 of the Insolvency Act 1986

The following Restructuring & Insolvency guidance note Produced in partnership with Robert Hantusch of Three Stone provides comprehensive and up to date legal information covering:

  • The process of disclaimer by a liquidator or trustee in bankruptcy under sections 178 or 315 of the Insolvency Act 1986
  • The nature of disclaimer
  • What can be disclaimed?
  • How to disclaim
  • Restrictions on disclaimer

This Practice Note covers the process of disclaimer and the steps to be taken to disclaim. For guidance on what disclaimer is and what can be disclaimed, see:

  1. Practice Note: The effect of disclaimer by a liquidator or trustee in bankruptcy on property and third parties

  2. Practice Note: What is considered onerous property or contracts?

  3. Checklist and timeline for disclaimer—checklist

The nature of disclaimer

Disclaimer is an entirely statutory procedure which is governed by the Insolvency Act 1986 (IA 1986) and the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024:

  1. in the case of liquidation, the relevant provisions are found in IA 1986, ss 178–182 and in IR 2016, SI 2016/1024, rr 19.1–19.11

  2. in the case of bankruptcy, the relevant provisions are found in IA 1986, ss 315–321 and IR 2016, SI 2016/1024, rr 19.1–19.11

What can be disclaimed?

The statutory provisions referred to above for both liquidations and bankruptcies provide that liquidators and trustees in bankruptcy (trustees) are entitled to disclaim any onerous property. Onerous property in each case is defined (IA 1986, ss 178(3) and 315(2)) as:

  1. any unprofitable contract

  2. any other property which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act

The form of onerous property