Adjudication for debt meaning

Bhundia v Dhar [2025] EWHC 1227 (Ch) What are the practical implications of this case? The judgment underscores the standard expected of chairs of creditors’ meetings when assessing proofs of debt. A finding of material irregularity showed the original liquidator’s appointment was defective: Mr Bhundia’s proof was not admitted to vote for the correct amount, and Mr Dhar’s vote was accepted when it should not have been. Accordingly, those presiding as chair (including directors or insolvency practitioners) must verify all claims, since their determinations are vulnerable to the court forming its own conclusion on the balance of probabilities if a challenge is brought. Errors can unravel the outcome of the meeting, requiring a fresh decision procedure. Secondly, the decision clarifies the limited finality of construction adjudication awards in an insolvency setting. The court firmly rejected Mr Dhar’s reliance on res judicata and merger, concluding that an adjudicator’s award is not final and does not extinguish other, separate claims (such as overpayments or items not supplied) arising under the...

What are the practical implications of this case? When proposing an MVL, directors must ensure their advisers receive every pertinent detail. If a liability is overlooked or contested, the MVL will almost inevitably have to switch to a CVL unless that sum is settled in full within 12 months, or any shorter timeframe set out in the directors’ declaration. The liquidator has no latitude to prolong this window. Under IA 1986, s 95, the liquidator is under a duty to effect conversion from MVL to CVL within seven days of concluding that the 12‑month cut-off (or any shorter period specified by the director(s)) will not be achieved. Once an MVL is underway, creditors of the company gain the advantage in any dispute because the 12‑month MVL deadline cannot be lengthened. Directors should also note that disputed sums are treated no differently for these purposes, and failure to meet the declared timetable compels conversion. There is no scope for any extension. Parties contemplating an MVL would be well...

Sanrose Investment Ltd v Foley and others; FWJ Legal Ltd (trading as Francis Wilkes & Jones) v Courtman and others [2025] EWHC 1071 (Ch) What are the practical implications of this case for insolvency practitioners? Insolvency office-holders should, as ever, adopt a careful yet proportionate, principled, reasoned and impartial method when adjudicating proofs of debt, and record their rationale through a transparent audit trail. Taking this course should protect them from personal liability for costs even if a creditor (or any other party with standing) successfully contests the decision. What are the practical implications of this case for legal advisers? Legal advisers should press office-holders to use an evidence-led evaluation of claims, particularly where the creditor is connected to the company and/or the facts are uncertain. Office-holders should also be urged to obtain legal advice—and follow it—where issues of law influence the admissibility or the value of the claim. What was the background? The investment and the LLP The dispute arose from a joint...

This Practice Note considers the position regarding the diligence of attachment in Scotland This note addresses how attachment operates within Scottish diligence, setting out the relevant position and context. For further guidance: on other types of diligence in Scottish civil procedure, consult Practice Note: Enforcement in Scottish civil litigation, which in turn connects to detailed guidance on a number of forms of diligence available in Scotland on the counterpart in England and Wales, see Introduction to enforcement—overview, which provides a general outline and links to more detailed guidance on various aspects of domestic enforcement in England and Wales on cross-border enforcement, refer to Practice Note: Cross-border enforcement—a guide for dispute resolution practitioners, which offers an overview and signposts more detailed guidance on multiple aspects of cross-border enforcement This Practice Note does not address land attachment or residual attachment; for those, see Practice Note: Adjudication for debt in Scottish civil litigation—anticipated future developments. In 2020, the Scottish Government commenced a policy review...

This is a glossary of common words and expressions used in Scottish insolvency law with the nearest England and Wales insolvency law equivalent (where relevant) Absolute insolvency Meaning: When a person’s liabilities are greater than the overall worth of their assets. Nearest English equivalent: Balance sheet insolvency. Accountant in Bankruptcy (AiB) Meaning: A Scottish Government agency overseeing the regulation of personal bankruptcy (sequestration and Protected Trust Deeds) in Scotland, and able to serve as trustee in sequestrations where no insolvency practitioner is appointed. It also maintains records of corporate insolvencies in Scotland (receivership and liquidations only) but does not perform the role of Official Receiver. See Practice Note: Scotland: the Accountant in Bankruptcy. Nearest English equivalent: N/A. Accountant of Court Meaning: A court-appointed officer within Scottish Courts and Tribunals who administers funds consigned to the Accountant of Court pursuant to a Court of Session interlocutor or during liquidation proceedings. They oversee Judicial Factors or Administrators appointed by the Court to manage estates...

This Practice Note reviews the present position on adjudication for debt in Scottish civil proceedings under the Bankruptcy and Diligence etc (Scotland) Act 2007 (BD(S)A 2007). For commentary on likely changes, see Adjudication for debt—anticipated future developments, below. For guidance on: other forms of diligence in Scottish civil procedure, see Practice Note: Enforcement in Scottish civil litigation, which in turn links to detailed guidance on a number of forms of diligence available in Scotland the equivalent in England and Wales, see Introduction to enforcement—overview which, as well as outlining the topic, links through to more detailed guidance on various aspects of domestic enforcement in England and Wales cross-border enforcement, see Practice Note: Cross-border enforcement—a guide for dispute resolution practitioners which, alongside an overview, links to more detailed guidance on aspects of cross-border enforcement Key BD(S)A 2007—Bankruptcy and Diligence etc (Scotland) Act 2007 CJJA 1982—Civil Jurisdiction and Judgments Act 1982 D(S)A 1987—Debtors (Scotland) Act 1987 ...