Disclaimer

The nature of disclaimer

Disclaimer is a statutory procedure which is governed by the Insolvency Act 1986 (IA 1986) and Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 that empowers liquidators and trustees in bankruptcy (trustees) to disclaim any onerous property (IA 1986, ss 178–182 (liquidation) and IA 1986, ss 315–321 (bankruptcy)).

Onerous property is in each case defined 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 that is most commonly encountered by office-holders is leasehold property, but disclaimer is in not in any way limited to leases. It applies to any contract or property that falls within the scope of the statutory definitions.

For further reading on what constitutes onerous property, see Practice Note: What is considered onerous property or contracts?

Once disclaimer has occurred then, unless and until a vesting order is sought and obtained, any disclaimed property which is not determined by