Speak No Evil: Section 236 Examinees And Immunity From Suit

• Published date: 18 May 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Court Procedure, Trials & Appeals & Compensation
• Law Firm: Wilberforce Chambers
• Author: Ms Clare Stanley QC and Lemuel Lucan-Wilson

The High Court has had to grapple with the application of witness immunity and the unique examination process under section 236 Insolvency Act 1986. Witness immunity (or immunity from suit) provides that no witness, party, counsel or judge may be liable for words spoken or evidence given in court proceedings; it is an absolute immunity from any civil proceedings based on such conduct. Immunity was removed from barristers in 2002¹, and for expert witnesses being sued by their own clients in 2011², but no authority has dealt with the position of examinees under section 236 until now.

Mitchell v Al Jaber [2021] EWHC 912 (Ch) was the hearing of an amendment application made by the liquidators to plead claims including (amongst others): misrepresentation; negligent misstatement; and conspiracy, alleging that a company director had knowingly given false information to the liquidators in the course of a section 236 examination.

Accordingly, the question arose as to whether the examination was a "judicial proceeding" for the purposes of the witness immunity rule, and whether the examinee was merely giving information (which would not attract the protection of the rule), or whether they were giving evidence as a witness.

The liquidators argued that although examination itself took place in court, it lacked the hallmarks of judicial proceedings: no issue was under consideration by the court on a s236 examination to arrive at even a non-binding determination - indeed, no decision was taken by the court on the basis of the examination itself; there was no usual procedure of examination-in-chief and cross-examination; and the examination was confidential and took place in private. Nor could the examinee rely on the privilege against self-incrimination. The liquidators further argued that as case law has referred to s236 as solely providing information, and that the examinee is different from the "ordinary witness", no immunity arose.

The respondents argued that whilst the examination itself does not resolve a dispute, it takes place in circumstances where the examinee is a party to an action, gives evidence in court and is subject to court control, which are the key elements of the immunity. The examinee gives evidence on oath, may be arrested for refusing to attend the examination, and may be committed for contempt of court for refusing to answer questions. In any event, the examination is part of wider insolvency proceedings which determine the issue of the...