- Court does not have jurisdiction to direct detailed assessment of fees agreed by administrators on application of liquidator
- Administrators can agree solicitors’ fees for work carried out during the administration after they cease holding office
- The court has no inherent jurisdiction to direct a detailed assessment
The administrators appointed to Hellas Telecommunications instructed Slaughter & May to act during the course of the administration and agreed their fees. One invoice was agreed and paid after they ceased to be in office. Hellas was wound up, liquidators appointed and the liquidators applied to court for a direction that Slaughter & May’s fees be assessed under rule 7.34 (subsequently repealed and replaced with 7.34A).
The Court of Appeal held that it was not open for the liquidators to apply to have decisions of administrators in relation to solicitors’ fees subjected to detailed assessment after those fees had been agreed. The Court of Appeal confirmed that this extended to fees agreed after the administrators had ceased holding office and liquidators had been appointed. The court has no inherent jurisdiction to direct a detailed assessment as rule 7.34 makes it clear that in an administration, only the administrators may seek such assessment.
The judgment confirms that if a subsequently appointed liquidator is dissatisfied at the level of fees paid to solicitors by former administrators, the proper route for challenge is via misfeasance proceedings and that there is no authority either under the Insolvency Rules or the court’s inherent jurisdiction to order detailed assessment in the alternative.