Vol 17 (2020) - Issue 4

Article preview

E-filing in Respect of Out-of-Court Administration Appointments: A Principled Path out of the Mire?

Synopsis
The English Courts have recently made it mandatory for all applications and other case documents in the Business and Property Courts and certain other courts to be filed electronically on its e-filing platform pursuant to Practice Direction 51O of the Civil Procedure Rules ('PDEW'). This includes filings which relate to the commencement of insolvency proceedings (and administrations in particular). The e-filing system permits filings at all times of day every day barring system failures or maintenance periods. Prior to the introduction of the PDEW, the English Insolvency legislation (Insolvency Act 1986 (as amended) and the related Insolvency Rules) prescribed certain procedures which allowed a holder of a qualifying floating charge (QFCH) to file documents commencing an administration process outside of court opening hours (specifically by fax and email to a prescribed email address). The legislation did not set out an explicit equivalent right for directors of a company to file documents commencing an administration outside of court opening hours. The 24/7 filing facility provided by the e-filing system has recently given rise to a number of cases in the English courts with respect to the question of whether an administration appointment purported to be made by either a QFCH or Directors of a company are effective if filed outside of court opening hours pursuant to the e-filing platform. Given that the cases have led to conflicting judgements, the Lord Chancellor has issued guidance which suggests that there will be amendments made to the insolvency legislation to address this issue whilst, in the meantime, any cases where either a QFCH or a Director appoints an administrator by using the e-filing platform outside of court opening hours will be referred to a judge as soon as possible. Whilst we wait for the case law to develop and/ or amendments to be made to the insolvency legislation, practitioners would be advised to make directors'/company appointments, to the extent it can be avoided, only during court opening hours and QFCH appointments, if necessary to make them outside court opening hours, use the process prescribed in the Insolvency Rules.