Court scrutinises Administrator cost estimates

Poxon v Wejo Ltd (In Administration) [2025] considered a “seemingly undecided” issue, that being whether the court is entitled to interrogate the reasonableness of the quantum of administrator’s fees claimed in relation to an administration under rule r.1816(4)(a) of the Insolvency Rules 2016.

On the facts, as the committee and the creditors to the company had been unable to agree the basis of the administrators’ fees in accordance with rules 18.18-18.20, the administrators brought an application under r18.23 asking the court to determine the quantum of fees due to the administrators for work done in relation to the administration.

In considering the administrators’ application, Judge Cawson KC noted that “a determination of whether the basis of remuneration should be fixed by reference to time properly given, etc. could not properly be done without the court scrutinising the remunerations that the Administrators were seeking to recover by reference to their fees estimate.”

This meant that the court needed to satisfy itself that the fee estimate was reasonable when considering the extent of the work undertaken by the administrators and given the apparent effectiveness with which the administrators appeared to be carrying out their duties.

Given the lack of information provided by the administrators, Judge Cawson was unable to form a view as to the reasonableness of the costs claimed. It was, however, clear that work of some considerable value had been undertaken. 

As such, rather than dismissing the application (which would have had the effect of barring the administrators from drawing down their remuneration), the court held that the appropriate action was to stay the application to allow the administrators to prepare and present sufficient evidence to enable the court to make a proper assessment of the reasonableness of the costs claimed.

Poxon v Wejo Ltd (In Administration) [2025] EWHC 135 (Ch)

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