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United Kingdom

Webster v Ashcroft: ECRO permission not retrospective; application to set aside statutory demand falls within ECRO; where creditor unaware, bankruptcy petitions should be adjourned (England and Wales)

Published on: 22 August 2019

Published by a LexisNexis Restructuring & Insolvency expert
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What are the practical implications of the judgment?

The ruling addresses three separate issues—two concerning ECROs, and a third relating to the effect of presenting a bankruptcy petition founded on an unpaid statutory demand where, without the petitioning creditor’s knowledge, an application to set that demand aside has already been lodged. On the ECRO front, the court underlines the force of CPR PD 3C, and applies it in clear terms. Where a litigant subject to an ECRO issues any claim falling within its scope, the claim is struck out automatically; no further step is needed unless permission has first been obtained from the court. Moreover, if permission is later granted under the ECRO, it does not retrospectively validate steps previously taken by the litigant—especially in relation to limitation, timetables, or other procedural deadlines that may already have expired. Instead, the permission simply allows the litigant to bring the claim or make the application they intended, on a fresh basis from that point. Clients who benefit from an ECRO’s protection (as the opposing party to a vexatious litigant) can take comfort that they are not required to take...

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