Wejo - Case Update

The High Court has decided to stand over an application to approve pre-administration costs and to determine how post-administration remuneration should be fixed to permit the joint administrators to file supplemental evidence to address certain issues identified by the Court.

Wejo, a Manchester-headquartered vehicle data tracking company, encountered financial difficulties after failing to secure additional funding, leading to its administration in July 2023. Recently, the joint administrators sought court approval for their remuneration and expenses, the pre-administration costs, and their discharge from liability upon completion of their appointment. The application was opposed by Securis Investment Partners, a creditor owed about $39 million. A dispute had arisen between the joint administrators and Securis over the latter’s priority as a secured creditor and its claim to the proceeds from the $14 million sale of intellectual property to Jacobs Engineering Group. Relying upon legal advice from two separate firms of solicitors, the administrators made an initial distribution of $10.65 million to Glas, a secured creditor owed approximately $15.5 million, on the basis that Securis had no secured claim to the funds, a position Securis contested. Securis has sought further information from the administrators regarding the sale to Jacobs, but has not commenced any form of proceedings, whether for pre-action disclosure or otherwise. The parties agreed that the issue of Securis’s priority as a secured creditor was not capable of being determined on this application, but may need to be determined at a later date.

Accordingly, the central issue on the application was whether the Court should approve the joint administrators' remuneration. The joint administrators sought approval for £361,651.20 in pre-administration costs and for their post-administration remuneration to be fixed by reference to time spent (in an amount not exceeding £857,984.80). Securis argued that the breakdowns of fees and estimates provided lacked sufficient detail to justify approving the remuneration.

The Court found that the administrators bore the burden of justifying their fees, as they are fiduciaries responsible for ensuring costs are reasonable and proportionate. While the administrators submitted timesheet extracts and general descriptions of work done, these did not provide sufficient granularity to link specific tasks to the claimed time and costs. The Court emphasized that office-holders must offer a clear breakdown of tasks performed, who performed them, and the rationale for the work undertaken.

Similarly, the Court found that the legal fees charged lacked necessary detail. The provided timesheets omitted work descriptions, making it impossible to assess the necessity and reasonableness of the legal costs, which amounted to over £235,000. While privilege concerns were noted, the Court suggested that at least some level of narrative explanation should have been included.

The Court acknowledged that the legal work was a third party expense that would ordinarily require less detail. However, the work here was done by a firm connected to the joint administrators’ firm. As a result, the Court found that a different standard should be applied.

Ultimately, the Court declined to approve the joint administrators’ remuneration at this stage. Rather than dismissing the application outright, the Court adjourned the matter for two to three months, allowing the administrators to submit supplemental evidence addressing these issues.

The decision can be accessed here.