Solicitors' fees not deemed to be expense of administration

The Court of Appeal has upheld the decision of the High Court in a case in which Walker Morris’s finance litigation team acted for the successful party.

After the complex and drawn-out saga of Portsmouth City Football Club’s insolvency, a former solicitor of the club, who had acted for it in connection with its opposition to a winding-up petition, sought to claim its fees and disbursements as an expense of the out-of-court administration. The Court of Appeal, however, disagreed — finding that it neither had the inherent jurisdiction, nor was there a legislative foundation, to provide such a ruling.

Between December 2009 and February 2010, Neumans acted for Portsmouth in its defence of a winding-up petition issued by HMRC on the grounds of an unpaid liability for VAT. Neumans ceased to act for Portsmouth when a new owner appointed administrators out of court, having the effect of suspending the ongoing winding-up petition…

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