HIGH COURT PROVIDES IMPORTANT CLARIFICATION OF INSOLVENCY RULES TO BUSINESSES
English v Secretary of State for Business and Trade [2026] EWHC 1711 (Admin)
The High Court, King’s Bench Division, Administrative Court provided clarity to the definition of ‘company’ within section 216(3) of the Insolvency Act 1986 and rule 22.7 of the Insolvency (England and Wales) Rules 2016 - sometimes referred to as the ‘existing use’ provisions or the third excepted case. Such provisions are designed to curb the mischief of phoenix trading.
A director of a limited company that had entered liquidation had breached the prohibition by continuing to trade as a sole trader in a soundalike name. He refused to change the name or cease trading, was prosecuted and convicted. He appealed by way of Case Stated.
The Appellant argued the third exception should be construed to apply to unincorporated businesses. 2HBs Dominic Hockley, instructed by the Insolvency Service Legal Directorate, opposed such an expansive interpretation and set out the coherent statutory interpretation required.
Mr Justice Fordham dismissed the appeal, stating “I accept the submissions of Mr Hockley” (§24) and confirmed the third exception did not apply to unincorporated businesses.
The case is reported: https://www.bailii.org/ew/cases/EWHC/Admin/2026/1711.html
Media:
https://iclg.com/news/high-court-rules-sole-traders-cannot-rely-on-company-name-exception/
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