Where Liquidators issued claims under the Insolvency (England and Wales) Rules 2016 (the Rules), when in fact part of the claim should have been brought under Part 7 of the Civil Procedure Rules (CPR), the Court considered whether the entirety of the claim should be struck out on the basis of procedural injustice.
The recent decision in Hawksworth v Stanley [2025] EWHC 139 (Ch) reiterated previous case law (Manolete Partners v Hayward [2021] and In Re Traxx (Aggregates) Limited [2023]) that hybrid claims cannot be brought under one "insolvency umbrella". Where office holders wish to pursue a mixture of office holder claims and company claims, they will need to issue separate proceedings, and this is an absolute requirement.
The Court considered whether, because of the Liquidators' failure to issue the claim in the correct forum, the claim should be struck out on the basis of procedural injustice. The Respondents argued had it been issued under the correct forum, namely by issuing a claim form under Part 7 of the CPR, they would have been served with the claim form and its particulars at a sooner date. Although the Judge agreed that the Respondents would have received the information sooner, it was held that this would likely only be a few weeks prior and, therefore, did not amount to a substantial injustice. It was also relevant that the Liquidators had paid the higher Part 7 issue fee.
The Liquidators sought a rectification of the procedural error. The Judge held this was not possible under rule 12.64 of the Rules, which have no application other than in insolvency proceedings. However, the Judge could, and did, use their powers under CPR 3.10 to correct the procedural error and ensure the claim could continue.
The judgment reminds practitioners that the power to waive procedural defects in hybrid claims is discretionary. While an amendment to the Rules has been suggested to allow hybrid claims in one set of insolvency proceedings, in the meantime this case demonstrates the importance of issuing hybrid claims correctly.
