Court can resolve liquidator fees when creditor machinery cannot operate

The High Court has held that it can determine a liquidator’s remuneration under section 112 of the Insolvency Act 1986 where the prescribed creditor decision process is incapable of producing an effective determination. In Re Float Capital Limited, decided on 5 August 2026Nationalarchives, the court stressed that demonstrated incapacity, rather than inconvenience, is the condition for interventionNationalarchives.

The court reviewed and discharged the Woodthorpe Order made on 24 July 2026Nationalarchives. That order had increased and approved Mr Woodthorpe’s remuneration as joint liquidator by reference to his £1,272,872 fee estimate for 23 August 2024 to 31 December 2028. After that order, the court became aware of Frost v The Good Box Co Labs Limited [2025] EWCA Civ 252. That binding decisionNationalarchives preferred a narrow reading of rules 18.24 and 18.28: increasing a time-cost fees estimate instead requires the rule 18.30 processNationalarchives.

For remuneration fixed on a time-cost basis, rule 18.30 prohibits drawing more than the fees estimate without approvalLegislation. The request goes to the committee, creditors or court that fixed the basisLegislation. Because creditors had fixed Mr Woodthorpe’s basis, his request belonged to themNationalarchives. The Bouchier Order was unaffected and standsNationalarchives: the court fixed the basis of Mr Bouchier’s remuneration under rule 18.23Nationalarchives, so a future request to exceed his estimate falls to the court under rule 18.30(2)(c)Nationalarchives.

The difficulty was that the major creditor, holding about 98% of unsecured debtNationalarchives, could not appropriately vote because of a conflict involving its administrators and the liquidatorsNationalarchives. The remaining creditors had not responded to the revised estimate or the applicationNationalarchives and had not attended the hearingNationalarchives. The judge found no realistic prospect of an affirmative voteNationalarchives. Deemed consent was unavailable because remuneration decisions require a qualifying decision procedure, and convening an ineffective procedure would impose costs on the estateNationalarchives.

The court held that section 112 could resolve the remuneration question in those circumstances, provided determination was just and beneficial to the liquidationNationalarchives. It could not bypass a rule 18.30 process still capable of operatingNationalarchives. The judgment invited submissions on the form of order; it should not be read as leaving the discharged fee approval intactNationalarchives.

For liquidators considering this route, the critical evidence is why the allocated decision-maker cannot decide, including conflicts and demonstrated non-participationNationalarchives. The legal basis is the Insolvency Act 1986, sections 112 and 246ZF(2), and the Insolvency (England and Wales) Rules 2016, rules 12.59, 18.24, 18.28 and 18.30, as considered in Re Float Capital Limited [2026] EWHC 2077 (Ch) and Frost [2025] EWCA Civ 252.