Friday 17 September 2021

UK: England and Wales: section 217 of the Insolvency Act 1986

Earlier this month, Robin Vos (sitting as a Deputy Judge of the High Court) gave judgment in PSV 1982 Ltd v Langdon [2021] EWHC 2475 (Ch). The judgment is noteworthy because it appears to answer a question previously unanswered by the courts concerning the operation of sections 216 and 217 of the Insolvency Act 1986. Here is that answer: "... the effect of Section 217 Insolvency Act 1986 is that ... once a liability is established in proceedings against the company, the defaulting director automatically becomes responsible for that liability. It is not necessary for the liability to be established in separate proceedings against the director" (para. [46]).  

Update (22 September 2021) - the ICLR has published a summary of the decision: see [2021] WLR(D) 491.

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