Jurisdiction(s):
United Kingdom

CVA binds the Crown: HSE fine a provable contingent debt, but prosecution costs excluded — Snoozebox v HSE [2023] EWHC 851 (Ch) (England and Wales)

Published on: 03 May 2023

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Snoozebox Ltd v Health and Safety Executive and another [2023] EWHC 851 (Ch)

What are the practical implications of this case?

The immediate takeaway is that, where uncertainty exists, creditors should lodge a proof in a CVA upon receiving notice, or at the very least engage with the CVA nominees ahead of the vote. The central difficulty for the Crown—HSE being treated as its emanation—was its non-participation in the CVA. As its inquiries had not concluded at that stage, it is unsurprising the HSE did not regard the contingent liability as sufficiently concrete to justify taking part. Indeed, attempting to quantify a prospective fine before any inquest would appear counter-intuitive to most prosecutors.

Set against that, the judgment underscores the expansive modern scope of provable contingent debts, particularly following Re Nortel GmbH [2013] UKSC 52. The more thought-provoking point raised is a normative one. It is suggested that the case exposes an unwarranted distinction between corporate and individual offenders. Fines imposed over...

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