Clare Arthurs tackles insolvency practitioners & personal liability
Good news for insolvency practitioners (IPs); bad news for disgruntled creditors: the High Court has held that IPs will not be personally liable for the costs of litigation commenced against them.
Round one
In Wright Hassall LLP v Duncan Morris [2012] EWHC 188 (Ch), Morris became administrator of two companies, which were defendants in ongoing litigation (the companies). Wright Hassall LLP (WH) agreed to act, and two conditional fee agreements (CFAs) were entered into: one for the initial advice given, and one for conducting the litigation. The CFAs were addressed to “Mr D Morris, the Redfern Partnership” and (unlike many of the other documents drawn up by both Morris and WH) they did not contain any disclaimer for Morris’ personal liability.
WH issued a claim form for unpaid invoices in March 2009 against Morris and his partner, trading as Redfern Partnership (Redfern). Morris argued that he had retained WH in his capacity as administrator and not in a personal capacity. The contemporaneous correspondence supported
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