Chandler v Wright

The High Court has found that myriad claims against the former directors of BHS fall to be struck out in the context of the high-value, complex litigation being brought by the joint liquidators of the BHS companies against the former directors of those companies.

Mr Justice Edwin Johnson, who heard the matter on appeal, has today handed down a judgment which will be of valuable assistance to practitioners in this area. The judgment reaffirms that causation and quantum are essential elements of a cause of action under section 214 of the Insolvency Act 1986, as they are for breach of duty claims under section 212, and that it is essential for liquidators to plead these elements – indeed it is “basic good practice, in terms of pleading” for them to do so. This pleading requirement will not be satisfied by an attempt to say that is it is obvious what the liquidators’ case is, or to argue that the case can be identified from some other source.

Further, given the scale of the claims and complexity of the BHS litigation, Edwin Johnson J held, it is not acceptable for a case on the date of knowledge for the purposes of a claim under section 214 to be left “at large” on the pleadings. A specific date or dates must be identified – and it is “essential that the relevant pleading identifies what the case is on causation and quantum for each of the alternative dates relied upon as the Knowledge Date”.

Daniel Lightman QC and Charlotte Beynon, instructed by Jan Mugerwa and Will Castledine of Olephant Solicitors, represented the successful Appellant in Chandler v Wright [2022] EWHC 2205 (Ch). 

To read the judgment, please click here.