Successfully Deploying Statutory Office-Holder Discovery Powers

Insolvency office‑holders have a powerful statutory toolkit in ss.234, 235, and 236 of the Insolvency Act 1986. Properly deployed, these provisions provide quick, cost‑effective routes to secure control of property and reconstruct the company’s affairs. But they are “extraordinary” powers, and the Court will insist on reasonableness, focus, and proportionality. Recent, contrasting decisions – Dale v BDO LLP [2025] EWHC 446 (Ch) ("Dale v BDO") and Webb v Eversholt Rail Ltd [2024] EWHC 2217 (Ch) ("Webb v Eversholt") – offer guidance on how to calibrate applications to avoid oppressiveness and to maximise prospects of success.

s.234: A summary route to get in property and records

s.234 is designed to help office‑holders “get in” property, books, papers, and records to which the company appears to be entitled from third parties, using a summary procedure. s.234 is especially valuable where entitlement to the relevant materials is clear and an order will conserve value or facilitate the office-holder's investigations. Respondents must comply with orders without unavoidable delay.

In a compulsory liquidation, a liquidator may enforce the powers directly, without need for a court order. Once granted, the summary procedure applies to any person in possession or control of company property or records.

Further, the office-holder may not be able to obtain relief under this mechanism where the issue of ownership is not a matter of English law or is subject to the jurisdiction of an overseas Court. There is no express sanction for failure to comply, but a court order may be enforced against a party in breach in the same manner as a judgment. The costs of compliance are almost always borne by respondents if the property is found to belong to the company.

Strategically, s.234 is a particularly useful and discrete route to quickly recover company property or records from former officers, advisers, or third parties, and for resolving straightforward entitlement issues. The procedure may not, however, be suitable for complex disputes over title or for money claims because its summary nature does not allow sufficient time to explore these issues or competing claims by third parties – though it can be a useful step to identify and obtain information which will inform future strategy.

s.235: Duty to cooperate with office-holder

s.235 imposes a wide, statutory duty on a broad class of persons to give the office‑holder such information and assistance as they reasonably require. The duty is broad and there is no prescribed procedure. In the first instance, the office-holder can simply contact the relevant person to request the information or the person's attendance, although a reasonable time should be given for compliance and the request should be sufficiently precise. The duty does not override legal professional privilege.

The section is designed to ensure that the office-holder can efficiently and effectively investigate the company’s affairs, recover assets, and fulfil their statutory duties. It is a powerful tool for insolvency office-holders, but its use is subject to judicial oversight to ensure that requests are reasonable and proportionate. It is often the first port of call in insolvency investigations.

In the event of non-compliance, the office-holder may apply to Court for an order to require compliance, providing evidence in support of the application including as to why the information or attendance is reasonably required, and which steps have been taken to obtain compliance (and to obtain the information from other sources, if appropriate) before resorting to Court. A person is liable to a fine if they fail to comply with their duty to co-operate without reasonable excuse.

s.236: Inquiry into the company's dealings

s.236 empowers the Court, on application by an office-holder, to order any officer, person known or suspected to be in possession of company property, or any person whom the Court thinks is capable of giving information about the company’s affairs or property, to provide information, produce documents, or attend for examination. The person may be ordered to submit "an account of his dealings with the company" in a witness statement verified by a statement of truth.

The Court will balance the office-holder's need for information against potential oppression, and will limit the extent of enquiry if any questions appear unreasonable. The office-holder should give prior notice before making an application. Information obtained is subject to an obligation of confidentiality, though this can be waived by the Court where appropriate.

Strategically, s.236 is a cornerstone of insolvency investigations. The provision enables office-holders to reconstruct the company’s affairs, trace assets, and lay the groundwork to pursue claims against wrongdoers or third parties.

Non-compliance can result in contempt of court, arrest, or seizure of property. The Court may also issue a warrant for the arrest of the person or seizure of books, papers, records, money or goods in the person’s possession if they fail to appear when summoned to do so, or if there are reasonable grounds to believe the person has, or is about to, abscond.

In practice, success turns on preparation and focus. The Court expects targeted categories, temporal limits, and an explanation of what has been done to obtain information informally and why the requested material is necessary to progress investigations or evaluate causes of action. Conversely, where a respondent has curated self‑contained records that uniquely capture key interactions and professional judgments (for example, audit working papers), a bespoke order may well be both reasonable and proportionate.

Dale v BDO and Webb v Eversholt: Contrasting outcomes, similar lessons

The same Insolvency and Companies Court judge reached a different decision within a year in Dale v BDO and Webb v Eversholt, each case turning on the precision of the office‑holders’ case for reasonableness, the scope of the relief sought, and the balance of burden and necessity.

Dale v BDO: Successful applicant who sought targeted, self‑contained audit files

In Dale v BDO, the joint liquidators of NMCN plc and its key subsidiary (NMCN Sustainable Solutions Ltd) applied under ss.235-236 for BDO’s audit files for the 2018 and 2019 financial years. The Group operated substantial long‑term infrastructure contracts in two key sectors, water and built environment, with turnover in excess of and first‑time adoption of IFRS 15 (which required that revenue for long-term contracts only be recognised when it was “highly probable” that a significant reversal would not occur) in 2018. BDO issued unqualified opinions on the 2018 and 2019 accounts.

Having retained the same auditors for ten years, the company was obliged to offer the appointment for competitive tender. BDO resigned in July 2020 and EY was appointed. Just under a month later, the company announced that following an extensive review of all of its major contracts, it now expected to make a loss before tax of between £13.5 million and £15 million for the year 2020, and that an external investigation had commenced. EY subsequently reported that it could not conclude the 2020 audit, or a 2019 restatement, because of pervasive issues, noting inconsistent IFRS 15 application, documentation gaps, and a culture of over‑optimism and diminished transparency. The company announced significant prior‑year contract adjustments and losses, the FRC opened an investigation into BDO’s 2019 audit, and BDO supplied the FRC with the 2019 audit file following a privilege review. The companies entered administration in October 2021 and compulsory liquidation in September 2024.

Following voluntary disclosure by BDO, the only remaining element of the liquidators’ application was for BDO's audit files. The liquidators explained the 2018 and 2019 audit files were necessary to investigate whether BDO breached the duties BDO owed to the companies. The Court accepted that the audit files uniquely recorded both BDO’s work and the information flows, and that attempting to recreate those interactions from c.80TB of company data across 500+ mailboxes would be disproportionate. The request was tightly defined (just the 2018 and 2019 annual audit files), a significant portion of which had already been screened for privilege for regulatory purposes, and the files were maintained as discrete repositories.

On those facts, the Court rejected arguments that the liquidators should first mine internal records or pursue pre‑action disclosure under the professional negligence protocol before seeking the files. ICC Judge Burton ordered delivery up, deciding that the liquidators' request was reasonable and any burden or litigation sensitivity was not oppressive.

Webb v Eversholt: Unsuccessful applicant who made a sweeping ss.235–236 application

In Webb v Eversholt, Eversholt Rail (365) Ltd (“365Co”) was an SPV holding a fleet of Class 365 rolling stock which 365Co leased.

365Co had no employees; all functions were performed by Eversholt Rail Ltd ("ERL") under a 2010 services agreement. The three 365Co directors were also ERL directors and used ERL email accounts. Board minutes from October 2018 recorded looming cash‑flow shortfalls under the head leases, options analysis, and a decision to repay a £5m intra‑group loan to ERL before year‑end. 365Co entered CVL on 19 August 2019, with PwC as liquidators.

The liquidators sought a broad order compelling ERL to provide “copies of all documents (save insofar as any such document has already been provided in unredacted form) in its possession custody or control relating to” 365Co, together with 12 other broad requests with no temporal limitation. The liquidators also made a request to ERL’s solicitors for legal advice, as well as a “summary of any advice given”. The evidence asserted entitlement to “reconstitute" 365Co's records because 365Co’s materials were intermingled within ERL’s systems. But correspondence showed substantial cooperation: ERL delivered a USB of core contractual documents at the outset and both ERL and their solicitors had responded to repeated targeted requests between 2020 and 2022.

The Court found that the liquidators did not meaningfully explain why their requests were reasonably required or exactly what gaps remained after substantial voluntary cooperation, including the offer of meetings to refine searches. One of ERL's directors estimated he had spent c.420 hours addressing the liquidators' requests. ERL's solicitors confirmed that ERL (not 365Co) was the client and resisted blanket demands for historic privileged files, inviting specific, justified requests.

ICC Judge Burton held that the applications were fundamentally misconceived and declined to compel the respondents to disclose. The Court emphasised that ss.235-236 require an explanation as to why the documents in question are reasonably required, and that it is not the for the Court to “determine the scope” of a liquidator’s entitlement to documents and information. The requests were global, untethered to defined investigations, lacked temporal limits, and ignored the staged, cooperative path offered by the respondents.

ERL's privilege remained intact; there was no evidential basis to treat the solicitors firm's advice to ERL as jointly privileged to 365Co or to compel disclosure. However, regardless of the potential merits of any argument that could be raised regarding common or joint interest privilege, as with ERL, the Court held that the breadth of the order sought against the solicitors was so wide - and unsupported by any evidence to explain the liquidators’ reasonable requirement to see all the documents falling within it - that the application against the solicitors failed.

Practical deployment

While their outcomes are different, these contrasting cases indicate a consistent, workable approach for office‑holders seeking to make successful ss.234–236 applications.

• Choose the right tool. Use s.234 for swift recovery of property and records where entitlement is plain and do not attempt to obtain possession of land ahead of receivers or outside CPR 55. Use ss.235 and 236 for information gathering, starting with informal, documented requests that are precise in scope and timing, escalating to Court only where cooperation falters or where coercive orders are truly needed.

• Define the reasonable requirement with specificity. Identify the investigation, the issues, and the precise materials that will move the needle. Explain what you already have, why that is insufficient, and why the targeted material is unique or materially superior to what is already held. Temporal limits and staged disclosure are persuasive; so too are explanations of why self‑contained bodies of material are particularly efficient sources.

• Avoid oppressiveness through calibration. Propose proportionate and efficient search parameters. Acknowledge costs, and the potential need for privilege reviews and confidentiality. Where appropriate, seek written responses in the first instance, defer oral examination until after documents and written answers are digested, and consider imaging and preservation orders as interim measures to prevent spoliation without forcing premature production.

• Respect privilege and confidentiality. Build protective terms into draft orders, accept redactions for privileged content, and where joint or common interest privilege is arguable, identify categories and relationships with care. Do not assume that advice obtained by a group service company belongs to or is accessible by the insolvent entity; show the legal basis and factual practice that would entitle access.

• Staged approach. Written answers and production of defined documents are usually the first step as they crystallise issues and may obviate the need for an examination. Imaging and preservation orders are appropriate where there is a risk of loss of relevant data, or where a targeted hold with counsel‑controlled access is a cost‑effective way to secure evidence while privilege and scope are resolved. Oral examination is exceptional, reserved for cases where documents and written answers are inadequate or evasive, and where the benefit outweighs the intrusiveness and cost.

A principled framework for applications under ss.234-236

The current authorities reinforce a principled, creditor‑focused framework. ss.234-236 are there to enable office‑holders to discover the facts quickly and inexpensively, but reasonableness and specificity are the price of entry. A coherent, focused evidential case that ties requests to investigations will generally be met with cooperation by the Court – and often by respondents. Oppressiveness must be avoided by scoping, sequencing, and safeguards and the Court will expect proportionality, staged orders, and respect for privilege and confidentiality.

Dale v BDO and Webb v Eversholt are two sides of the same coin. Where the request targets a defined, self‑contained body of uniquely relevant material and explains why it is needed, relief will likely follow. Where the request is global and unexplained, it will be refused. Used appropriately, ss.234-236 remain a reliable first resort for office‑holders, enabling efficient recoveries and investigations while maintaining fairness to those from whom assistance is sought.

By Kate Gee, Partner, and Oliver Steeple, Senior Associate, at commercial disputes law firm Signature Litigation. Signature recently co-hosted, as part of the London International Investigations and Asset Recovery Conference 2025, a roundtable focusing on identifying, obtaining and deploying critical information in a successful asset recovery strategy, including Norwich Pharmacal relief and Bankers Trust orders.