No entitlement on the part of Liquidators to assessment of Legal Fees agreed by Administrators and incurred during prior Administration.
The Court of Appeal has found that where a firm of solicitors provides legal services to a company in administration, and the firm and the administrators agree the amount of their fees, subsequently appointed liquidators of the company cannot ask the Companies Court to assess those costs, either under Rule 7.34 of the Insolvency Rules 1986 (as they were at the time) or under the inherent jurisdiction of the court, even where the agreement took place after the administration had terminated.

If the liquidators do not agree with the fees that have been paid, the only remedy is to bring misfeasance proceedings against the administrators.

Whilst this decision is based on the old Insolvency Rules and is not directly applicable to administrations commencing after 6th April 2010, insolvency practitioners should take care to ensure that legal fees are vetted properly before they are agreed.
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Monday, 01 March 2021

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