Successful Rule 14.8 application leads to full admission of client’s claim and £33,000 indemnity costs awarded
Problem:
Our client, a respected provider of vocational education and training, was owed £255,000 following the delivery of accredited courses to vulnerable learners under a formal subcontracting arrangement. The debt was already subject to a binding Tomlin Order following previous legal proceedings.
Despite partial payment under the agreement, the debtor company entered liquidation and failed to pay the remaining balance. The appointed liquidators then rejected our client’s proof of debt in full, alleging learner record irregularities and potential duplication of funding. These claims were unsubstantiated and raised long after the underlying services were delivered and the debt contractually settled. Our client’s ability to recover any outstanding amount was now at risk.
Outcome:
Go Legal launched a prompt and well-evidenced challenge under Rule 14.8 of the Insolvency (England and Wales) Rules 2016. Following a contested Business and Property Court hearing, the High Court set aside the liquidators’ rejection, admitted the client’s proof of debt in full for £255,000, and ordered that £33,000 in indemnity costs be paid from the liquidation estate.
This ensured our client’s rightful recognition as a creditor and secured a clear path to financial recovery.
Details of the Case:
Our client delivered training programmes in customer service, employability, and well-being aimed at disadvantaged learners. The services were fully completed, documented, and verified through ILR records, enrolment forms, workbooks, and sign-off from the debtor’s own internal quality team.
The original contractual dispute was resolved through a Tomlin Order—a court-approved settlement agreement. When the liquidators later rejected the proof of debt, we demonstrated that their decision was:
- Legally flawed, as it failed to give effect to the Tomlin Order.
- Factually unsupported, lacking credible evidence of any wrongdoing.
- Procedurally unfair, with no meaningful opportunity given to the client to address the allegations.
The Court agreed on all points, restoring the client’s claim in full and awarding indemnity costs in recognition of the liquidators’ unreasonable conduct.
Legal Tip:
If your debt is backed by a Tomlin Order or judgment, it should carry significant weight in any insolvency process. A rejection by liquidators can be challenged under Rule 14.8, but time is short—applications must be made within 21 days.
Why Choose Us:
- Specialist expertise in commercial litigation, insolvency, and creditor recovery.
- Strong track record challenging liquidators’ decisions and defending proof of debt claims.
- Strategic, evidence-led approach to complex disputes and hearings.
- Experienced team with in-depth knowledge of the Insolvency Rules and court processes.
- Commercially minded—focused on cost-effective, decisive outcomes.
If your proof of debt has been rejected or you’re facing challenges in a liquidation process, we can help. Call Go Legal on 0207 459 4037 or use our online form to request a Free Consultation today. Don’t let unpaid debts disrupt your business—let us help you recover what you’re owed.
Karim Oualnan, Partner
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