Jurisdiction(s):
United Kingdom

Key definition

Hotchpot definition

What does Hotchpot mean? In legal practice, hotchpot describes bringing earlier receipts into account so that a later distribution is shared fairly among those entitled. In insolvency and bankruptcy (England & Wales, Scotland, Northern Ireland and Ireland), the hotchpot principle prevents a creditor from double or multiple recovery. A creditor who has realised value elsewhere—such as from security or from distributions in a foreign or related proceeding—must give credit for that amount before sharing in dividends, ensuring equality of distribution (pari passu). This is a descriptive expression applied by the courts and reflected in insolvency legislation and rules in each jurisdiction. In succession and trusts, hotchpot...

Hotchpot (equality rule) in insolvency: English law, EU Recast Regulation and UNCITRAL Model Law (CBIR): secured carve-outs, concurrent proceedings and practical guidance

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Hotchpot rule of domestic English Law

The hotchpot doctrine has long formed a settled element of domestic English law. In essence, it obliges a Creditor to give credit for sums recovered in another jurisdiction, whether through court action or otherwise, before sharing in any dividend in English Insolvency. Where the rate it has achieved overseas outstrips the percentage payable to other creditors in the English process, it is barred from taking part in the dividend distributed in England. The Privy Council, in Cleaver v Delta American Reinsurance (in liquidation), encapsulated the rule as requiring a creditor to 'bring into the common fund what he has received abroad'. It also made clear that the rule has no application to property that never entered the common fund (eg secured assets). In Cleaver, a secured creditor (the letter of credit meant he was secured in substance) was entitled to realise his collateral, set the proceeds against the indebtedness, and lodge a proof in the English liquidation for any remaining shortfall. He was not obliged to bring to account the proceeds of his security. Accordingly, the foreign realisation reduced the debt but did not bar an English claim for any remaining shortfall after enforcement...

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Web page updated on 21/05/2026

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