What the latest case means for Insolvency Practitioners
Applications under sections 235 and 236 of the Insolvency Act 1986 are a routine but powerful part of an office-holder’s investigative toolkit following liquidation. They exist to enable liquidators and administrators to obtain information and documents necessary to understand the company’s affairs and, where appropriate, pursue recoveries.
A recent High Court decision in Webb & Hussain v Eversholt Rail Ltd [2026] EWHC 101 (Ch) is a clear reminder that those powers are not unlimited. While the purpose of sections 235 and 236 includes enabling office-holders to reconstitute the company’s knowledge, that purpose does not displace the statutory requirement that the information sought must be reasonably required.
For insolvency practitioners, the decision reinforces the need for precision, evidence and structure when framing applications.
What did the High Court decide?
The joint liquidators sought wide-ranging relief against a connected company and its solicitors. In material part, the draft order requested “all documents…relating to the business, dealings, affairs or property” of the insolvent company, including but not limited to certain specified categories.
At first instance, ICC Judge Burton refused the application. On appeal, Sir Anthony Mann upheld that refusal.
The liquidators’ primary submission was that they were entitled to documents necessary to reconstitute the corporate knowledge of the company, effectively without temporal or categorical limitation. The High Court rejected that approach. Reconstituting knowledge may explain the purpose of sections 235 and 236, but it does not by itself establish that every document requested is reasonably required.
The court made clear that an application framed on an “everything forever” basis will attract careful scrutiny.
What must office-holders demonstrate under sections 235 and 236?
The decision confirms that an applicant must establish:
- A requirement for the information or documentation; and
- That the requirement is reasonable in the circumstances.
It is not sufficient to assert that the office-holder lacks information or that the company’s records are incomplete. Nor is it enough simply to articulate the broader purpose of investigation.
The court emphasised that unless liquidators can show that they reasonably require all of the material sought, they must identify the portion that is reasonably required. In other words, the jurisdictional threshold is document-specific, not purpose-driven.
For office-holders, this places evidential weight on how each category of documents is justified.
Why is “reconstituting corporate knowledge” not a stand-alone justification?
The High Court accepted that reconstituting the company’s knowledge is a legitimate objective of sections 235 and 236. However, it rejected the proposition that this objective automatically entitles an office-holder to unrestricted disclosure.
- If the underlying purpose alone were sufficient, any application could succeed merely by invoking that purpose.
- The court described that approach as inconsistent with the statutory framework.
This aspect of the judgment is significant for applications seeking broad disclosure from connected parties, particularly where group structures and shared service arrangements mean that documents are not segregated. The absence of records at the outset of an appointment does not remove the requirement to demonstrate reasonable necessity.
How should section 236 document requests be structured?
The decision provides practical drafting lessons.
First, categorisation matters. Requests should be structured by clearly defined categories, with an explanation of why each category is reasonably required. Broad, composite requests combining extensive material with narrower subcategories risk being treated as a single wide-ranging claim.
Secondly, alternative pleading should be considered. The High Court noted that narrower categories of documents could, in principle, have been advanced as alternatives to the primary, wider request. Where fallback positions are not clearly articulated as alternatives, the court is not obliged to reconstruct the application in a more focused form.
Thirdly, context and timing are relevant. A more expansive request may be easier to justify at an early stage of investigations, particularly where urgent steps are required to secure assets or preserve potential claims. Even then, the evidential basis for the request must be articulated.
In practice, careful preparation of the supporting evidence is as important as the drafting of the order itself.
Should alternative routes be considered?
The case also highlights the importance of considering alternative procedural routes.
In Webb & Hussain, there was a services agreement between the insolvent company and a connected entity. That agreement imposed obligations to maintain certain records. The court observed that specific performance under the contractual framework, potentially by way of Part 8 proceedings, may have been available.
While Part 8 disclosure may not always achieve the same breadth of relief as a section 236 order, it can serve as a structured starting point. If contractual disclosure yields only partial information, that evidential gap may in turn support a more focused section 236 application.
For office-holders, the strategic question is not simply whether section 236 is available, but whether it is the most proportionate and defensible first step.
Practical implications for insolvency practitioners
The decision does not narrow the statutory powers under sections 235 and 236. Rather, it reinforces that those powers must be exercised within defined limits.
Applications should therefore:
- Categorise documents clearly and justify each category;
- Avoid undifferentiated “all documents” requests unless properly evidenced;
- Frame narrower categories as alternatives where appropriate;
- Align the relief sought with the stage of the investigation;
- Consider contractual or other procedural routes before resorting to wide-ranging applications.
Contested section 236 applications frequently turn on drafting discipline and evidential framing rather than abstract questions of principle. Where applications are likely to be resisted by connected entities or professional advisers, a structured approach can materially reduce litigation risk.
Sections 235 and 236 remain central to effective insolvency investigations in England and Wales. However, as this decision demonstrates, they are not a blank cheque. The court will expect office-holders to explain, with precision, what is required and why.
