Hybrid Claims

The recent case of Manolete Partners vs Hayward & Barrett Holdings and others (Re Blackwater Plant Limited) has caused a stir in the insolvency community as it has the potential to impact how certain claims can be brought and managed.

The judgment by Chief ICC Judge Briggs restricts the claims that can be brought through Form IAA Insolvency Application to only "insolvency proceedings" under Parts I to XI of the Insolvency Act 1986, while other claims must be brought by way of Part 7 claim. The decision means that claims against directors for breaches of duty must be pursued by the Part 7 claim procedure, leading to the potential for different courts handling the same case, increased costs and court fees, case management issues, differing requirements for witness statements etc and bureaucracy.

The timing of the decision coincided with the Insolvency Service's review of the Insolvency Rules, which has now closed for consultation. The Insolvency Service has confirmed concerns raised will be carefully considered to determine if changes should be made to the scope of insolvency applications in order to make court proceedings more efficient and without unnecessary bureaucracy