5. Mr A complains that HMCTS backdated the seal to indicate when a Remuneration Application was issued, which was lodged in August 2021.
6. He says backdating the application notice deprived him of the opportunity to challenge the fees and remuneration of a Trustee in bankruptcy and the court has ordered him to pay £250,000 in costs in relation to this application.
7. As an outcome he wants HMCTS to acknowledge the seal was backdated.
8. This very brief backround is only intended to place the key events in context, not to provide a full, chronological account of everything that happened. It is based on information Mr A has shared prior and at the commencement of our primary investigation. Further information provided during the course of the investigation is referenced in the analysis.
9. On 19 August 2021 after the close of business, solicitors for the liquidators of Claims Direct lodged a remuneration application, under Section 18.34 of The Insolvency Act to challenge the fees and remuneration of the Trustee in bankruptcy, (the Trustee), which had effectively left no funds available for the unsecured creditors of the estate involved in a bankruptcy case.
10. Mr A says a copy of the Remuneration Application was returned to the liquidators solicitors (the solicitors) on 8 December 2021.However he says the copy of the remuneration application was unsealed. However, he says the application was endorsed with the time and place for the hearing and this was handwritten on the application.
11. He says a notice of hearing scheduled for 17 January 2022 was included, this was sealed with the date 10 November 2021 handwritten on it.
12. On 12 January 2022 the solicitors applied to adjourn the 17 January hearing, on the grounds that negotiations were ongoing that would mean Mr A was substituted as the applicant in this case.
13. On 21 January 2022 Mr A completed the purchase of the rights to the debt and all claims, from the Liquidators of Claims Direct. This included the claim to challenge the fees and expenses of the Trustee (via the Remuneration Application). This means Mr A became the applicant in the remuneration application.
14. He says the application was never served on the Trustee, either by himself or the solicitors.
15. However, he says on 28 February 2023 HMCTS emailed what purported to be a sealed copy of the application dated 19 August 2021, to a partner at the Trustee’s solicitor’s law firm. The partner wrote back to HMCTS saying the seal was unclear and requested confirmation of the day upon which that application was issued.
16. Mr Carrol says that HMCTS responded. He says they did not confirm the date upon which the application was actually issued, but said:
‘it would have been 20 August 2021’
17. There were further court hearings and applications made by both Mr A and the Trustee between January 2022 and June 2023 in relation to the Remuneration Application despite it appearing that neither the solicitors, nor Mr A ever served the application on the Trustee.
18. On conclusion of a number of applications and hearings Mr A says he has been ordered he pay the Trustees’ legal fees which are in excess of £250,000, in relation to an application that he believes was not served on the Trustee and could never have been served anyway.
19. Mr A has applied to the courts to appeal the outcome.
22. The substantive part of Mr A’s complaint is regarding the sealing of a court application, and the date on which it was actually sealed. In this case a seal is the mark the court puts on a document to indicate the application has been received and processed by the court.
23. When an application or claim is made to the courts, the date on which the claim is brought or lodged is the date on which it is physically received at court, either electronically or in hard copy. This is important and applies to situations where there were time limits in which the applicant could make an application or a claim.
24. It is relevant here, because under The Insolvency Rules 2016, 18.34 a remuneration application must:
‘be made no later than eight weeks after receipt by the applicant of the progress report under rule 18.3, or final report or account under rule 18.14 which first reports the charging of the remuneration or the incurring of the expenses in question (“the relevant report”).’
25. This means 20 August 2021 was the last day the remuneration application could be made. Any later and it would be time barred, so should not have been accepted by HMCTS automatically, and would have required judicial consideration as to whether it would be accepted or not.
26. The date which a claim is issued is when HMCTS process the application, place a court seal on it, and it is ready to be put before the judiciary for listing or directions. This means proceedings have started, and this is important as there can be time limits from this point in terms of how long an applicant has to serve the sealed claim or application, depending on what the claim or application is for.
27. HMCTS is the administrative function of the courts. While it is part of the Ministry of Justice, the judiciary are totally separate from HMCTS.
28. HMCTS is responsible for a wide range of services required to ensure that the courts function properly. For example, they are responsible for issuing claims, taking in claims from other courts, issuing and processing applications, preparing and serving notices and a wide range of other administrative functions.
29. Often the work they do is purely administrative, and this can be done independently.
30. However, they also carry out duties and tasks where they can be acting on delegated authority or under direction from a judge. Some of the duties and task it performs requires judicial direction, orders, or permission before they can carry them out. This can also change, dependent on the type of application, or the particular court.
Complaints Correspondence
31. Mr A initially raised concerns on 30 June 2023 about the Remuneration Application. HMCTS responded on 18 July 2023.
32. In its initial response to Mr A, HMCTS said it had gone through the court file and was unable to confirm the exact date on which the court applied the seal to the application.
33. It went on to say that applications should be sealed on the date they are issued by the court, not a later date.
34. It then went on to say it had spoken to a member of the court staff who could not confirm whether the application was backdated but that he knew they were not able to backdate seals.
35. It apologised that it was not able to clarify the exact date the court applied the seal to the application.
36. HMCTS’ review response reiterated that seals are applied on receipt of the application and are not backdated. It said the application was sealed on 20 August 2021. It accepted the seal is a little blurry, but it is still clearly legible as that date.
37. It apologised Mr A had previously been informed the application was not sealed, but confirmed it had reviewed the file, and the seal was there.
38. It explained the solicitors had instructed that the application was returned to them for service, so referred Mr A to the solicitors regarding him not receiving a copy.
39. It apologised that Mr A had previously been informed that the application was not sealed.
40. HMCTS’ final response reiterated that court applications are sealed when they are received as part of an administrative process and having investigated the complaint, were satisfied the seal was not backdated.
Are there indications the Remuneration application was retrospectively sealed in February?
What Mr A has told us
41. When Mr A brought his complaint to us, he considered the seal was created retrospectively, in February 2022.
42. He said this is why the court could not confirm the existence of the application in September and October 2021, and also why the copy sent to the Liquidator’s solicitors on 8 December bore no seal at all.
43. He said that he believed seal was retrospectively applied on 28 February 2022 when the solicitor for the Trustee made enquiries about the application, and he has shared the email correspondence with us.
44. Mr A also says the court informed him that ALL insolvency applications are referred to a District Judge to determine if the case can be issued and this is why none of the other applications made in relation to the case were sealed and the day they were applied for.
45. He has also shared the insolvency rules below which he says supports his view that the application needed to be referred to a judge prior to its issue.
Rule 18.37 of the Insolvency Rules 2026 state:-18.37.—(1) On receipt of an application under rule 18.34 for which the court’s permission is not required, the court may, if it is satisfied that no sufficient cause is shown for the application, dismiss it without giving notice to any party other than the applicant.(2) Unless the application is dismissed, the court must fix a venue for it to be heard.
46. He says this supports his view that the application could not possibly have been sealed on the 20 August 2021, having only being received by HMCTS on the evening of the 19 August 2021. He says it would be unrealistic for this ever to have been put before a judge to consider prior to the application being sealed the next working day.
Our view
47. The crux of Mr A’s complaint to us concerns what happened when the application was lodged by the solicitor, when it was sealed, and by association when it was processed, and whether this could have any impact on whether the application could ever have been issued, so we have focused our consideration on what happened when the application was received.
48. We acknowledge Mr A’s concerns regarding the timelines in which other applications and orders have been sealed in relation to this case, and the reasons why he might question the promptness in which HMCTS appear to have sealed this application in comparison to others.
49. It is of note that Mr A was not the applicant at the time the remuneration application was made so there are some gaps in his knowledge of the timeline and what exactly happened when the application was lodged at court.
50. Therefore, we have asked HMCTS about the timeline of Remuneration Application to establish what should have happened, and what did happen when the application was received, and the timescales in which each required step of the application took place prior to it being returned to the solicitors.
51. There are no electronic records. However, the case was tracked and managed on an internal spreadsheet along with other cases which does log progress of the application.
52. HMCTS explained it received two copies of the application. The first application was issued and emailed to the court after the close of business on 19 August 2021.
53. It has explained the application was processed and sealed on 20 August 2021.
54. It explains it aims to do this within 14 days of receiving applications of this type, and in this case, this was done on 20 August 2021.
55. It explains a second application was received by post. The covering letter was dated 20 August and the court stamped to say it was received on 23 August 2021. However, it said the original emailed application had been accepted and processed, so this was why the application was stamped with the 20 August 2021.
56. It is of note that Mr A has told us that the solicitor’s had to send a hard copy of the application by post because the file was too big-this has been addressed in the section below.
57. HMCTS has explained that once the application is processed and any court fee taken, the application is added to a work queue to be referred to a judge. This so the judge can consider whether a hearing is needed, or directions were to be made.
58. It acknowledged in this case there was a delay in referring the sealed application to the judge, The spreadsheet indicates the application was considered by a judge on 15 September 2021.
59. The court records indicate the judge directed that the application should be heard, it was listed for 17 January 2022.
60. An entry on the court spreadsheet on 15 November 2021 then says the case was listed for a BT Meet Me telephone conference for 17 January 2022.
61. There appears to have been a further delay because the solicitors said they did not receive the application and the notice of hearing until 8 December 2021.
62. At the time the application and notice of hearing was sent, Mr A was not the applicant. We have seen the solicitors, at the time of lodging the application, requested the application was returned to them to serve on the respondent.
63. Mr A said the solicitor never received a sealed copy of the application and from the information Mr Carrol has provided, we can see this appears to be the case.
64. From the available information we can see the solicitors received an endorsed but unsealed copy of the application notice, and a sealed notice of hearing. Mr A has explained that without being sealed, the application notice never could have been served.
65. Mr A says the unsealed application sent to the solicitors supports his assertion that the application was not sealed on 20 August 2021, as he considers the application had never been sealed at the time of being lodged at court, and therefore the application had not been issued.
66. That said, while we can see the application notice was not sealed, we cannot see any information that the solicitors raised any concerns that the application notice was unsealed at the point of receipt. Nor did they raise any concerns about the application notice not being sealed when they made an application to adjourn the 17 January hearing, or a further application to substitute Mr A as the applicant.
67. Mr A has said that the key to understanding when the application was issued, was when it was paid for, as HMCTS would not issue an application without taking payment first.
68. Therefore, we asked HMCTS about payment for the application. HMCTS explained the fee was considered paid on 20 August 2021.
69. HMCTS have told us that this application was paid for using HMCTS’ online pay system, Pay by Account (PBA).
70. PBA is a service provided by HMCTS which enables legal firms and organisations who frequently bring proceedings and actions to HMCTS, to set up accounts which allows HMCTS to take payment for fees electronically and automatically.
71. In effect this means that applications to the court will not be delayed due to payment clearance times as the correct fee will be deducted either directly from existing funds or on the basis of credit, at the point of lodging any applications/actions. The solicitors had such an agreement in place.
72. We can see that payment by PBA was not referenced in the application lodged on 19 August 2019, however further correspondence between the court and the solicitor’s took place on 20 August 2019, including a phone call regarding the application.
73. HMCTS have told us payment by PBA was actioned on Friday 20 August 2024 at the time of processing the application.
74. The letter Mr A provided from a different solicitor into enquires he had made in February 2024, also confirms the court fee of £25 was taken in August, although they have not provided the date.
75. We acknowledge that Mr A’s concerns about there being a requirement for the application to be referred to a judge, prior to the application being sealed. Particularly as HMCTS have told him this, some applications do require permission prior to being accepted and all orders and directions must be put before a judge prior to issue.
76. However, we do not consider this application needed to be seen by a judge prior to the 20 August application being sealed. This is because we consider the action of sealing this type of application when it is received by the is a purely administrative task which denotes receipt and processing of the application.
77. We consider the insolvency rule Mr A has shared above in paragraph 38 does not apply to the point at which the application is received by HMCTS, and it processes the application, in other words when the application was lodged or issued by the applicant.
78. We consider the insolvency rule Mr A has shared does not apply to the point where the application is lodged.
79. We consider it applies to the point at the judiciary receive the application, so when the sealed and paid for application has been put in the job queue to be reviewed by a member of the judiciary. This would only happen after it been stamped to confirm receipt, processed and payment taken.
80. At this stage, we consider this seal was merely to denote the application had been received and processed, not that it had been considered by a judge.
81. Prior to the application being returned to the solicitors, as they had requested, the application did however need to go before a judge to establish what happened next. This is because would need to be listed. Listing is a judicial function, and therefore it would require judicial direction for the application to be progressed.
82. We understand why, when he and others had been informed by HMCTS in the Autumn of 2021 that no application had been issued, why he may have retrospectively questioned whether the application lodged by the solicitors in August 2021 was processed and sealed at the time of HMCTS receiving it.
83. We also acknowledge that, when Mr A was made aware in January 2021 that the solicitors had never received a sealed copy of the application how this would have added to Mr A’s concerns.
84. We do not know the exact line of enquires Mr A, the Trustee’s solicitor or the other creditors made in September and October 2021. However, if the queries were regarding when the application was listed for hearing, it would have reasonable for HMCTS to inform them there was no hearing listed.
85. This because the courts internal spreadsheet indicates, while the application was put before a judge on 15 September 2021, it was then moved to the listing team with directions to list as a telephone conference. It was not actually listed until 15 November.
86. This means if anyone contacted the court to see when the application was to be heard between 20 August 2021 and 15 November 2021, if HMCTS told them there was no such application listed for hearing, this was correct.
87. However, this does not explain why, HMCTS said there was no record of the application at all, which appears to have been the case in some of the enquires made during this time.
88. We can also see, in its first complaint response that HMCTS told Mr A it could not determine when the application had been sealed. Although HMCTS acknowledged Mr A had been told this in error and has addressed this with the team, we think that caused further concerns for Mr A.
89. Our investigation has not seen any indications that would lead us to consider HMCTS backdated the seal on the remuneration application in February 2022.
90. We consider HMCTS did receive the email on 20 August 2021. We can see there was correspondence between HMCTS and the solicitors on the 20 August on a number of maters regarding the application. We consider it processed the application, took payment for it and sealed it on that day.
91. In addition, from the court file we consider that following the issuing of the application, the appropriate steps were taken in terms of referral to a judge and listing.
92. It is unfortunate that HMCTS then sent out an unsealed document to the solicitors, and we understand Mr A’s assertion that the solicitors would have required a sealed notice of the application for service.
93. We have not be able to establish exactly how this came about and why an unsealed copy was sent to the solicitors. However we consider the existence of the HMCTS printed application(printed on 20 August) , and the further hard copy provided by the solicitors by post may have caused confusion for the listing team when they were listing the application for hearing.
94. However, HMCTS could have rectified its error at any point and provided a copy of a sealed application notice, had the solicitor requested it at the time.
95. We consider that, with payment being actioned by PBA on 20 August, this further confirms the application had been processed and sealed on 20 August 2021, as the seal indicates.
96. We can see however that HMCTS may have conflicting information or caused confusion in September and October 2021 as to whether the application had been made. We can also see in HMCTS’ initial complaints response that is also gave conflicting information as to when the application had been sealed.
97. We can see HMCTS apologised for both of these matters and gave feedback to the relevant individual. Having considered all of the relevant and available information on this case, we would not ask HMCTS to do anything further on this matter.
98. We can see no indication that the seal was retrospectively sealed in February 2022.
Should the application have been sealed on 23 August 2021 rather than 20 August 2021
99. The basis of Mr A’s initial complaint to HMCTS and to us was that, HMCTS had retrospectively sealed the application in February 2022 as result of questions being asked by the respondents legal team at that time, putting a sealed date on the application of 20 August 2021. We have established above, that we do not consider this was the case.
100. However, during the course of our investigation Mr A has raised a different concern, based on further information he has seen in relation to when the Remuneration Application was issued.
101. As Mr A has not raised this concern with HMCTS it is technically premature for us to look at, however we do have the discretion to look at premature complaints. We have done this here as it relates to the same application.
What Mr A has told us
102. Mr A says, he categorically does not believe the application was sealed on 20 August 2021.
103. However, on the basis of new information he has seen, he considers HMCTS was not able to download the application on 20 August due to the size of the file and requested that the solicitors post a hard copy instead.
104. He has also shared a letter from the liquidator’s new solicitors which says:
‘Due to the size of the documents, the court asked for the documents to be sent via post. The same documents were sent by first class post on 20 August 2021.’
105. On this basis he says the application could only have been sealed by HMCTS when it received the hard copies, on 23 August 2021, which would have meant the application was time barred.
106. He explains that the solicitors sent three hard copies of the application to HMCTS by post. He said HMCTS sent two unsealed copies back.
107. He says he believes the court retained a sealed hard copy, and this is the copy that bears ‘the dodgy stamp.’
108. He has reiterated the hard copies of the application were only received on 23 August 2021, therefore the application could not possibly have issued with a court seal on 20 August 2021.
109. He has also pointed out that the application the court retained (the sealed copy) has clear staple marks in it, which match the copy of the endorsed, but unsealed copy of the application the solicitor shared with him in January 2022.
110. He says this further supports his view that the sealed copy could not be the electronic version emailed on 19 August 2021, it could only have been the hard copy.
111. He also points out while the first date number (2) on the seal is clear and easily recognisable. However, the second date number is not as clear, and he believes this could actually the number 3, and not a 0.
112. Mr Carrol has explained the implications of this are that if this was the case, and the application was only lodged and received by HMCTS on 23 August 2019, the remuneration application was made out of time. This is because The Insolvency Rules 2016 say:
18.34(3) The application by a creditor or member must be made no later than eight weeks after receipt by the applicant of the progress report under rule 18.3, or final report or account under rule 18.14 which first reports the charging of the remuneration or the incurring of the expenses in question (“the relevant report”).
113. The above rule means that the remuneration application had to be lodged and received by the court by 2019 August at the latest, otherwise it had been made out of time.
114. Mr A has also explained that the solicitors had not provided a means of payment in the application it sent by email on 19 August 2021, so the application could not have been processed.
Our View
115. It is of note, that in the absence of electronic file records being used in the court at this time, we are not able to review all aspects of the application.
116. However, we can consider the information shared by Mr A and the information HMCTS has provided in our consideration. We have also asked HMCTS for copies of the correspondence that took place between HMCTS and the solicitors on 20 August 2019.
117. HMCTS explained there are limits to the size of applications it will print. The limit is 50 pages, and this application was 101 pages.
118. We can see at 9am HMCTS emailed the solicitors to say the application was a legacy case and therefore not on ce-file (the electronic system used by the courts).It explained the email exceeds data limits and will not be printed and that the solicitors had to send in hard copies.
119. So we can see that HMCTS initially requested a hard copy.
120. However later that day we can then see that at 12:55pm the solicitors emailed again, after a telephone conversation between HMCTS and them had taken place. They requested that the application notice, witness statements, exhibit and draft order was printed, and the solicitors PBA account debited for the printing costs.
121. We consider the application was then printed (on paper that did not have the solicitors company heading) and sealed on 20 August 2019. There is no indication that this could not be done on this date, nor should the later date of 23 August 2019, when the hard copies were received at court be considered as the date the application was lodged (so therefore should only have been sealed then).
122. From our correspondence and communication with Mr A, we understand how stressful and frustrating this entire case has been. Our decision is in no way meant to diminish the impact this case has had.
123. We hope we have explained the thorough consideration we have given to our decision, clearly outlined the reasons for this and given Mr A clarity on what happened when this application was lodged at court.
124. We understand this continues to be a very difficult situation, and we hope our consideration at least provides some direction as to the next steps available to him.
1. We have carefully considered Mr A’s complaint about HM Courts and Tribunal Service and decided we can take no further action with it.
2. This is because, based on the information we have seen we consider HMCTS did process and seal the Remuneration Application when it said it did.
3. We understand this decision may by frustrating for Mr A, due to the circumstances of his complaint. Our decision is in no way meant to diminish the effect the issues he has told us about, both in relation to his complaint and the concerns he has raised about his experience with the court.
4. We hope our statement clearly explains the reasons for our decision.