Defining ‘legal process’

In Re Frankice (Golders Green) Ltd in Administration and others Ch D, TLR 14 June

The administrators of three companies in administration applied for directions as to whether regulatory proceedings initiated by the Gambling Commission fell within the moratorium in para 43 of Sched B1 of the Insolvency Act 1986. The issue was whether regulatory proceedings constituted a ‘legal process’ within para 43(6) of Sched B1, which could not be instituted or continued without the consent of the administrator or permission of the court. The nature of the decision to be made by the regulatory panel and the circumstances and procedure in which the decision was to be made fell within the description of legal process. There could be no general public policy that regulatory decisions or the enforcement of regulated conduct could not fall within the scope of the para 43 moratorium. The court should exercise a measure of control by taking into account all relevant interests. It was appropriate to refuse permission for a review hearing to take place before the completion of a contract with an intended purchaser. In interpreting ‘legal process’ the word ‘process’ suggested something with a defined beginning and an ascertainable outcome which was governed by a recognisable procedure and ‘legal’ indicated that the process must in some sense involve the compulsive power of the law.