UK: Office Holders’ Remuneration

Last Updated: 4 December 2006
Article by Peter Fidler

It is not often that office holders’ remuneration comes before a court. For many sorts of office holder there are provisions for the remuneration to be agreed with a committee or the creditors generally. SIP 9 provides guidance on the information to be provided to such bodies. In the last resort application can be made to the court.

In the case of provisional liquidators, the remuneration must be fixed by the court and Insolvency Rule 4.30 sets out the matters to be taken into account. In three cases involving insolvent insurance companies (Independent, BAI and most recently UIC) an assessor was appointed to advise the court.

To view the article in full, please see below:

Full Article

It is not often that office holders’ remuneration comes before a court. For many sorts of office holder there are provisions for the remuneration to be agreed with a committee or the creditors generally. SIP 9 provides guidance on the information to be provided to such bodies. In the last resort application can be made to the court.

In the case of provisional liquidators, the remuneration must be fixed by the court and Insolvency Rule 4.30 sets out the matters to be taken into account. In three cases involving insolvent insurance companies (Independent, BAI and most recently UIC) an assessor was appointed to advise the court.

In most cases, a provisional liquidator is in office for only a short time. In the case of insolvent insurance companies, it was the practice, until administration became available at the end of May 2002, for provisional liquidators to be appointed. Frequently they were in office for a number of years until a scheme of arrangement was put in place, sometimes even beyond that. In most of these cases the remuneration has been fixed by a registrar and little information has been made public.

Some of the main points in the high court judgment in the UIC case are worth noting because they will be relevant to other insolvency office holders.

  1. The narrative provided by the provisional liquidator to support his application should be sufficient to prove what work has been done, not in terms of the actual activity (writing a letter, attending a meeting etc) but by reference to the nature of the work the fee earner was engaged on. This should be sufficient to enable the court to assess whether the work was necessary or worthwhile, whether or not excessive time was spent on it and whether or not it was done at the right level of delegation. If tasks are performed by overqualified persons, there should be a reduction in the remuneration claimed in order to reflect this. A deduction made by the registrar by reference to what were described as "null and unhelpful entries" was upheld.
  2. When an outside consultant is employed, he should be charged as an expense. It is not legitimate for the provisional liquidator to seek remuneration for this at a higher rate than the consultant’s actual fee, as if he were being charged as a member of the provisional liquidator’s firm’s staff.
  3. The registrar considered that the hourly rates claimed were at the high end of a reasonable level, and because of the inadequacy of the evidence put forward by the provisional liquidator the registrar was not willing to allow such high rates. The judge did not consider that decision to be wrong or one which was not available to the registrar on the material before him. Nor was he swayed by the provisional liquidator’s claim that when a scheme of arrangement was eventually put in place, 10 years after the provisional liquidation began, creditors would receive 145p in the £ as opposed to 26p which was in prospect when they were appointed. The judge held that provisional liquidators are not entitled to a "success fee". The success of the provisional liquidation has to be taken into account but the court is not permitted to award an extra success fee beyond reasonable remuneration. The effect of "success" is that the court is likely to be more favourably inclined to the remuneration claimed, but not so as to allow more than is fair and reasonable.
  4. Time should not be recorded in 15 minute units. 6 minutes is now the norm.

Where an appointment is expected to run for some time, the office holder will wish to have provision for sums to be drawn on an interim basis, pending final determination by the court. The judge ruled that it is not appropriate for the court to order that he may be paid by reference to his firm’s hourly partner rate. This rate may be a starting point, but the court must still decide whether that rate is appropriate in the circumstances. As this will be difficult to determine early in a lengthy case, such office holders may have to be content with a percentage of the hourly rate as an interim measure, leaving room for adjustment at a later date with much lesser risk of there being an excess to be repaid to the estate.

As this case was contested until near the very end, issues arose as to costs which will not be applicable in all cases. The judge agreed with the registrar that the provisional liquidators should be reimbursed reasonable costs for preparing the application and providing evidence. The judge did not accept that all the trial costs of the provisional liquidators should be borne by them personally and that the objecting creditor’s trial costs should be paid by them personally with no right of reimbursement from the estate. Whilst the provisional liquidators plainly lost on some issues, it was wrong to require the provisional liquidators in effect to bear all the costs of the hearings nor was it right that the costs of the provisional liquidators and the creditor should all come out of the estate. Accordingly certain matters as to costs were reserved.

Note: Peter Fidler was the first practising solicitor to be appointed an assessor by a High Court judge in a provisional liquidator’s remuneration application.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 01/12/2006.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.