What is Section 236 of the Insolvency Act 1986?
Section 236 of the Insolvency Act 1986 gives powerful investigatory rights to insolvency practitioners, such as liquidators and administrators. These powers are used to look into the affairs of a company that has entered insolvency, with the aim of recovering assets, identifying wrongdoing, and understanding how the company was run.
The provision allows the court, on application by the insolvency practitioner, to summon a wide range of individuals to provide information. This includes current or former directors, employees, accountants, and even third parties believed to hold company property or knowledge about its business dealings.
Once summoned, those individuals can be required to produce documents, attend court, or provide a formal account of their dealings with the company. This includes supplying any relevant books, records, or papers in their possession or control — whether in physical or digital form.
Failure to comply with a section 236 order, without a reasonable excuse, can lead to serious consequences. The court has the power to issue a warrant for arrest and seize documents or property. In some cases, individuals may also be examined under oath. For directors under investigation, full co-operation is essential. Refusing to comply can escalate matters and result in criminal or civil sanctions.
How Are Insolvency Practitioners Using Section 236 in the Digital Era?
Insolvency practitioners are increasingly turning to digital communications when investigating insolvent companies – and section 236 gives them the tools to do just that. Traditionally, this provision was used to obtain paper records like ledgers and contracts. Today, it’s being applied more widely to include phones, messaging apps, cloud accounts, and other forms of digital storage.
The courts can compel individuals to produce “books, papers or other records” that are relevant to the company’s dealings. That definition includes WhatsApp messages, Signal chats, Telegram threads, and emails stored in the cloud.
With more business being conducted via mobile devices and encrypted platforms, these communications can be critical to tracing transactions, recovering assets, or investigating director conduct.
If the communications relate to the company’s business, they could fall within the scope of a section 236 request – even if they’re stored on a personal device.
Can Section 236 Be Used to Compel Access to WhatsApp, Signal or Telegram?
Yes – insolvency practitioners can use section 236 to apply for a court order requiring you to hand over communications from apps like WhatsApp, Signal, Teams or Telegram.
The courts interpret “books, papers or other records” broadly. If the messages relate to the company’s affairs, and you have access to them (for example, on your phone or in the cloud), you may be required to produce them.
Encryption does not offer blanket protection. The court focuses on whether the messages are relevant to the Company’s affairs and whether you can access them. If you can, they can be ordered to be disclosed.
If you’re facing such a request, it’s essential to seek legal advice immediately. There may be grounds to limit the scope of what should be disclosed. e.g. on the grounds of legal privilege or confidentiality – but ignoring the issue is never the right option and may well expose the respondent to a cost order.
Recent Case Law: What Are the Courts Saying?
Recent cases confirm the courts’ willingness to adapt section 236 to the digital age.
In Re Corporate Jet Realisations Ltd (in liquidation); Green v Chubb and another, the court confirmed that digital data can be compelled if it’s reasonably required by the liquidator to carry out their duties. This case highlighted that the Liquidator’s request should not however, be too widely drafted.
In Brian Glasgow v David Ames [2022] EWHC 2834 (Ch), the Court ordered disclosure of electronic documents under section 236 for the benefit of an overseas office holder, in circumstances where the Court found that disclosure of electronic records was necessary for the office holder to undertake investigations.
The trend is clear: if the communication is relevant and accessible, the courts are likely to permit disclosure under section 236 regardless of whether it the records concerned are held physically or electronically.
What Happens If You Refuse to Hand Over Digital Communications?
If you ignore or refuse a request under section 236, the consequences can be serious.
The court can issue a warrant for your arrest and order the seizure of devices or documents. You could be held in contempt of court — which carries the risk of fines or even imprisonment. A respondent who unreasonably refuses to deliver up books and records can also be ordered to pay the insolvency practitioner’s costs of the Court application.
The court may draw adverse inferences from a failure to cooperate with an insolvency practitioner and this could harm your position in related litigation or director disqualification proceedings.
The safest approach is to respond promptly, seek advice, and engage constructively with the insolvency practitioner or their legal team.
What If the Communications Are Personal?
Using a single phone or device for both personal and business use is common — but it complicates matters in insolvency investigations.
If business messages are stored on your personal device, they are still likely to fall within the scope of a section 236 request. Courts will try to balance your right to privacy with the need to investigate, and may narrow the request by the insolvency practitioner, or allow filtering of data to protect unrelated personal information.
That said, courts are not afraid to look at mixed content if it contains business-related discussions and they will balance the needs of the insolvency practitioner and the respondent to an application.
Can Insolvency Practitioners Access Deleted Messages or Encrypted Chats?
Section 236 does not allow hacking or bypassing encryption. But if you have access to backups or devices containing deleted or encrypted messages, you may still be ordered to produce them.
Deleted messages aren’t necessarily gone — they may exist in cloud backups or on another synced device. If so, and if they are relevant to the company’s affairs, they could be subject to disclosure.
Don’t assume deletion will protect you. If asked, you may need to explain what was deleted, when, and why. The Court may well be asked to draw inferences from any deletion of documents, records and messages relating to the Company’s affairs.
Do Directors Have Any Defences or Grounds to Resist?
Directors do have rights — and it’s possible to push back against a section 236 request, but it must be done the right way.
You may be able to resist or limit a request if it is:
- Disproportionate or overly burdensome
- Infringes personal privacy
- Seeks documents protected by legal privilege
- Too broad or not relevant to the company’s affairs
Courts are open to hearing legitimate concerns, especially where sensitive data is involved or where the action taken by the insolvency practitioner is objectively, oppressive. You may also be able to propose independent review mechanisms (such as third-party filtering) to protect privileged content.
However, objections should never be made lightly or used as a delay tactic. Legal advice is essential.
How Should You Respond to a Section 236 Request?
If you receive a request under section 236, don’t ignore it.
Step one: get legal advice. A solicitor can help you understand what’s required, protect your rights, and deal with the insolvency practitioner or court on your behalf.
Step two: review the request carefully. Identify what documents or data are being asked for, what is accessible and whether any records held contains sensitive or privileged content.
Step three: cooperate – but do so wisely. If the request seems too broad, your solicitor can help you challenge or narrow the scope of the insolvency practitioner’s request.
Always keep records of your response and correspondence. And if you need more time, ask for a reasonable period of time with reasons.
Ignoring a section 236 order can lead to contempt of court and financial penalties.
How Can Directors Protect Themselves in Advance?
Prevention is better than cure and a few simple steps can help protect you long before any section 236 request arrives:
- Use official company systems for business communications
- Keep personal and business devices separate
- Avoid using apps like WhatsApp for important company matters
- Maintain good digital record-keeping practices
- Put internal policies in place for communication and data storage
- Seek early legal advice if you’re concerned about insolvency risk
By building good habits and clear boundaries now, you can avoid confusion, protect your personal privacy, and respond confidently if ever challenged.
Final Thoughts: The Expanding Powers of Insolvency Practitioners
Digital communication is now central to how companies operate and it’s equally central to how insolvency practitioners investigate.
Section 236 gives Insolvency Practitioner’s broad legal powers to access business-related records held electronically, including that stored on personal phones, devices or encrypted platforms. The courts are keeping pace with technology and they are willing to enforce these statutory powers firmly.
Directors do however still have rights. With proper legal advice and a proactive approach, it’s possible to comply with your duties whilst protecting yourself.
If you’ve received a section 236 request, or are worried about the risks of investigation, speak to the team at Francis Wilks & Jones. We’re here to help you navigate these challenges and safeguard your position.
