New rules allow Companies House to share non-public information with insolvency officeholders

New rules in the UK allow Companies House to share non-public information with insolvency officeholders and the Official Receiver.

While in many cases there may be limited non-public information available from Companies House that will be useful to insolvency officeholders, this is another tool available to deploy in appropriate cases. It is specifically envisaged to assist officeholders pursuing claims for fraudulent and wrongful trading, transactions at an undervalue and preferences.

The Information Sharing (Disclosure by the Registrar) Regulations 2024 (the Regulations) came into force on 20 December 2024. The Regulations extend Companies House’s existing powers that permit disclosure of non-public information to public authorities for the purposes of those authorities fulfilling their functions. 

The functions of an insolvency officeholder, such as maximising returns for creditors, are private rather than public matters for these purposes. The existing regime therefore did not permit Companies House to disclose non-public information to an officeholder or the Official Receiver.

Assisting an officeholder with claims in an insolvency

The Regulations permit Companies House (technically, the Registrar) to disclose information to insolvency officeholders and the Official Receiver where the Registrar is satisfied that disclosure is necessary for the purpose of assisting the officeholder to pursue certain claims in the insolvency (including fraudulent and wrongful trading, transactions at an undervalue and preferences) or is otherwise necessary for the purpose of assisting with the tracing, realisation or recovery of property in the insolvency. 

The Regulations do not prescribe what amounts to ‘information’ for these purposes nor does the relevant Bill’s passage through Parliament provide guidance on what specific information is likely to be within scope of the Regulations. However, in the absence of any specific restrictions, ‘information’ would appear broadly to include any materials, documents or other data or information held by Companies House. Any disclosure by Companies House must comply with applicable data protection legislation such as the UK GDPR. Permission from HM Revenue & Customs is also required for the disclosure of any of their information.

“Another tool available to officeholders and the Official Receiver to support the exercise of their powers in appropriate cases”

The Regulations are part of reforms introduced by the Economic Crime and Corporate Transparency Act 2023. The Government’s position in the Parliamentary debate was that the Regulations would have effects beyond economic crime and would benefit officeholders looking to pursue personal claims against an insolvent company’s directors.

The Regulations are unlikely to be of significant practical benefit to officeholders in most cases, but are another tool available to officeholders and the Official Receiver to support the exercise of their powers in appropriate cases. The English court may also now expect officeholders to request information from Companies House under the Regulations before seeking the court’s assistance with compelling a party to disclose information that may be held by Companies House.

Assignment of claims by an insolvency officeholder

The trend of allowing a broader remit of information to be used in insolvency related litigation can also be seen in the recent decision of the English High Court in Asertis Limited & Anor v Melhuish & Ors [2024] EWHC 2819 (Ch) in which the court held that a liquidator could provide documents obtained under the compulsion powers in section 236 of the Insolvency Act 1986 to an assignee of a cause of action from the liquidation.

In that case, the court held that: 

• while an assignee who has purchased a claim from a liquidator does not ‘step into the shoes’ of the liquidator for all purposes, it was consistent with the public policy underlying the ability of officeholders to assign claims under section 246ZD of the Insolvency Act 1986 for the assignee to access documents obtained by the liquidator through the exercise of their compulsion powers - and use those documents to pursue the assigned cause of action; and 
• information and documents obtained by a liquidator through the exercise of compulsion powers remain subject to a qualified duty of confidentiality, but practical steps could be taken on a case-by-case basis to appropriately address confidentiality issues – in that case, the judge ordered documents be redacted.

The judge explained that it would be for the officeholder in each case to decide whether to seek the court’s permission to provide confidential information to an assignee (prior to any such assignment) and (should such assignment have been made) for the assignee to decide if permission is required to subsequently use any such confidential information in litigation. The judge indicated that the officeholder and assignee seeking permission will be the ‘usual course’ but each case will be fact sensitive.

How the court’s guidance in the Asertis case may sit with the powers introduced by the Regulations is a matter for another day.

A copy of the Asertis decision is available here.