The purpose of this guide is to explain the role of the independent supervising solicitor and the key aspects to look at when choosing the right person for the job.

I am going to give you some free top tips based on my 25 odd years’ experience, what you need to look out for, the pitfalls and what can go wrong on the day.

What is the role of an independent supervising solicitor?

In short, the supervising solicitor is an independent officer of the court and must also be independent of both the applicant, respondent, and their respective solicitors. As an officer of the court, the supervising solicitors job, as the name suggests, is to independently supervise and ensure that the search order is properly executed.

The moment the search order has been served on the respondent; the supervising solicitor’s job is to explain the order in everyday language to the respondent so that they understand what it means in practical terms. The exact wording of the search and seizure orders will differ but generally the respondent must be advised of:

• Their right to obtain legal advice.
• Their right to apply to vary or discharge the order; and
• The fact that they may be entitled to claim legal professional privilege or privilege against self-incrimination.

Once you read this guide, I invite you to apply for a complimentary no-cost “independent supervising solicitor consultation” with me to discover how I can use my experience to make sure that the court order is executed smoothly and in accordance with the terms of the order.

Wishing you every success.
James Edward.
Solicitor and Partner.
James Edward & Associates.

TIP 1: Do not make the mistake of thinking you can read the Order on the way to the subject premises-be prepared!

This reminds me of the military adage, the 6P’s: proper planning and preparation prevents poor performance. A great deal of time and expense is invested in the court application process by the Provisional Liquidator and the evidence seized could help uncover millions of pounds worth of assets, whether through a provisional liquidation or otherwise. Accordingly, it’s paramount to invest time getting your ducks in a row.

Any supervising solicitor worth their salt must be familiar with the terms of the order as there certainly won’t be time to read the order on the job. An order and the appendices, which have been carefully crafted by the applicant provisional liquidator, their solicitors and counsel, could be 20 pages long.
So, when you have been up at the crack of dawn to travel to the premises, that is not the time to start reading through the detail of the order.

The reason for this is that in my experience things can happen very quickly. One never knows what will happen on an early morning ‘raid’. Some respondent directors will be in shock, others sensible and compliant, whilst other directors may overreact and panic. If you are ill prepared and have not absorbed the dos and don’ts of the court order you may find yourself becoming overwhelmed by what’s happening on the ground and this is when mistakes are likely to happen.

Having supervised the execution of numerous search and seizure orders at James Edward & Associates we understand the importance of being familiar with the terms of the order so that we can quickly defuse volatile situations in a professional manner. This naturally assists with the administration of justice ensuring that provisional liquidators are able to extract and safeguard key evidence in a cost effective and efficient way.

The last thing you want to see happen is for the seizure order to be declared invalid and open to criticism from the court or the respondent director’s lawyers, and the evidence seized ruled inadmissible. Another point on the preparation front is to ensure that the provisional liquidator has a list of the company’s mobile phones to avoid any arguments on the day as to whether or not they are company property. Have a list of the numbers to hand and any phone bills addressed to the company.

If things go wrong and the search and seizure order is wrongly executed, just think of the costs thrown away, of the lawyers’, their agents and of course not to mention the creditors time such as HMRC.

Preparation also means being familiar with the technical side of knowing the relevant rules. Search orders are often prepared on short notice and therefore cannot reasonably be expected to cover every prospect which arises on the day of the search.

Disputes can arise between parties on the day of the search in respect of the scope of the order which cannot be resolved save with a determination from the court. Part of the supervising solicitor’s role is to ensure that the search is limited to the specific documents and parameters in the order.

They must prevent any unauthorised search beyond the scope of the order. Should a dispute arise, the supervising solicitor, can exercise reasonable limited discretion in relation to the execution of the search pursuant to CPR PD 25A.7.5(13) or may refer such issues to the court for resolution taking any items which form the basis of the dispute into safekeeping in the absence of an agreement between the parties.

From the outset, it is crucial to ensure that the supervising solicitor you instruct has the required expertise in these situations and who has prepared thoroughly through meetings with colleagues and the lawyers concerned to try and manage the risk of things going wrong on the big day.

TIP 2: Expertise and good communication skills with the respondent director.

There is no real science behind the latter, and I’m certainly not a psychologist but knowing how to deal with a director and how to read them can be highly advantageous. The respondent directors may not have a good command of English or understand the terms of the order, so it’s very important to remain patient and explain the order in detail. If you don’t, you will certainly not be doing your job properly and it may mean that vital evidence is not seized.

By way of example on one occasion, a director refused to hand over his company mobile phone to the provisional liquidator’s agents. I decided to take the director aside and have a private conversation where we were not overheard to hear his objection to delivering up the company’s mobile phone. It turned out on this particular occasion that he had private photographs which he did not wish to share. My advice to the director was that under the terms of the order the phone had to be delivered up to the provisional liquidator. The director did not like the advice but I explained the consequences of breaching the order, including the penal notice and what was meant by contempt of court.

The best solution I have always found it is to obviously treat the respondents with the utmost respect, keep calm and explain the order in terms they will understand and to emphasise that as an officer of the court I am neutral and not working for the provisional liquidator.

TIP 3: Ensure you have colleagues on hand who have previous experience.

Trying to learn on the job when supervising a search and seizure order is extremely difficult. This is because there are too many moving parts. It’s not uncommon, to have a small team of process servers barging through the company premise’s front door weighed down with boxes of evidence, with receptionists and other staff from the respondent company startled, all wondering what on earth is going on.

Then there is the company director to deal with who as I say, might be in shock, compliant or react aggressively.

Accordingly, it’s vital to have well trained and experienced colleagues who know how to handle the situation who have all learned from previous searches.

That’s why at James Edward & Associates we will sit down together before the date of the execution and talk through the terms of the order and discuss what the order does and does not permit. We even rehearse what might happen on the day and we ask ourselves what could go wrong on the big day of the search.

By way of example, on one occasion I was supervising the execution of the order part of which included the seizure of various mobile phones on business premises. An argument broke out between the company staff and provisional liquidator’s agents.

I had been in another part of the five storey business premises watching a server being digitally copied and analysed, but fortunately an experienced James Edward & Associates colleague was able to calm the situation down with the company staff, until I was able to join him to explain the order to the employees.

If you turn up with colleagues with no prior experience it is more likely that if things go wrong, they will not be able to react in the correct manner.

Tip 4: Be ready for the unexpected.

Risk management is all about trying to reduce the threats of things going wrong. Of course, notwithstanding the former sometimes with all the planning in the world, the unexpected can happen.

With all of the time and expense invested in the application for the search and seizure order it’s important to have an experienced supervising solicitor and their team who are able to deal with the unexpected.

On one particular search and seizure case, where I was acting as the independent supervising solicitor, there were numerous members of the provisional liquidator team. These consisted of lawyers, process servers, security, and digital computer experts. The group probably consisted of 20 or so people which meant that we had to travel separately in our vehicles to the company’s premises in a busy high street with no parking.

Whilst I was parking and unbeknown to me it came to my attention that one of the provisional liquidators team was extremely keen to start seizing evidence and was going to do so before I had even arrived at the premises and read the order to the respondent director. Obviously it would have meant that I was not supervising the gathering of the evidence or available to deal with any queries from the director about the terms of the order. The impact of the latter could again have been extremely costly.

Do not assume that a provisional liquidator’s team will understand your role. Talk them through what is going to happen, paint a picture for them so they can visualise the steps that will be taken on the day.

Tip 5: keep detailed and contemporaneous notes.

A key aspect of the supervising solicitor’s role is advising the respondent in respect of the terms and effect of the search and seizure order including any rights they have pursuant to the latter. How this information is communicated is crucial and the respondent must be advised in plain English.

Attention to detail

Under CPR Practice Direction 25A, the supervising solicitor also has a vital role in precisely recording events on the day of the search by way of a report filed at court shortly after the search.

The supervising solicitor’s report sets out compliance with his/her duties but can also be a crucial document for either party following the search should a dispute arise in respect of compliance with the order. Supervising solicitors must also ensure compliance with their other technical duties such as compiling a list of materials removed from the premises and allowing the respondent to check the list and have a copy of the same.

What happens after a search has taken place?

After the search and seizure, the supervising solicitor will submit their report to the court before a second hearing takes place, which both the applicant and the respondent will attend. The Respondent can address the court and ask that the search order be discharged. In either event, the matter will then proceed to trial following the usual course.

It’s Time to Take Action!

If you are planning to seek a search and seizure order it’s important to plan ahead to make sure that your chosen supervising solicitor is available. To do this please call us on +44 7441912822 to make an appointment or email me on jb@jamesedwardassociates.com

About the author

James Edward L.L.B (Hons) is a solicitor and partner and an expert in insolvency law who specialises in insolvency litigation. He has acted as an independent supervising solicitor on numerous occasions. James has also acted for and advised the UK’s most experienced and largest firms of insolvency practitioners when they pursue directors. James is regularly asked to write articles for leading publications and to provide talks on insolvency related matters.

So why should I instruct you and not another solicitor? What’s in it for me if we hire you?

James Edward & Associates are insolvency litigation specialists; we have a wealth of experience and knowledge to draw on.

What others say about us?
“I was appointed as the provisional liquidator and James Edward was the independent supervising solicitor, appointed by order of the court. We had a very early start but under Jeremy’s expert supervision, the search and seizure was handled professionally throughout. It certainly took a lot of pressure out of the situation on the day.”

“James Edward was the independent supervising solicitor on a provisional liquidation I worked on. James was extremely professional, calm and collected in supervising the order and in dealing with the director” Head of Investigations.”

“James Edward and the team at James Edward & Associates has been completely supportive and helped us to navigate a very negative 9-month legal problem. Their attention to detail and common-sense approach to tackling heated legal questions with a cool perspective, ultimately saved us 100,000’s! They cared enough when our chips were down to help us get out of a bad deal…thank you James Edward & Associates!”

“I first contacted James Edward & Associates late on a Friday morning. At the start of a bank holiday weekend. I had received by email that morning an instruction that a court hearing had been made related to an issue that I was involved with. After preliminary discussions with James Edward (Senior Partner) about the case I decided to instruct James Edward & Associates to represent my interests at the court hearing. In effect this only gave us 1 full working day to prepare our submissions, appoint council and be prepared. The Summit team were super-efficient and kept me up to speed on all aspects of the case. The barrister selected was professional and efficient. Our challenge to the hearing was successful and we were awarded costs. This was an important decision that we were obliged to fight at very short notice. Without the commitment of the whole team at James Edward & Associates I am sure the outcome of the copyist proceeding would have been vastly different. Their attention to detail, professionalism, speed of action and importantly communication was exemplary. Thanks to all concerned.”

Crypto assets are currently a hot topic in the insolvency world and one with which IPs are engaging across the globe.

There are increasing numbers of cases worldwide where either a crypto business has failed, crypto assets form part of an insolvent Estate or assets in an Estate are converted into crypto assets with a view to avoiding payment to creditors.

What are Crypto assets?

A crypto asset is a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored, or traded electronically. A record of transactions is held on a “blockchain”.

The term “crypto asset” is wider than crypto currency and includes, for example non -fungible tokens (“NFTs”). NFTs are a type of crypto asset whereby users purchase a cryptographic token of a particular asset (it can be either physical or digital), which cannot be swapped directly for other NFTs (ie they are non fungible).

They allow owners to cryptographically prove the authenticity of their asset and their ownership of it through the blockchain, giving it a perceived value.

NFTs are valuable because they verify the authenticity and ownership of a non-fungible asset. NFTs can digitally represent any asset such ds digital artwork.

The Law Commission has recently published a report on Digital Assets which provides further detail and a copy of this is here.

Why are so many crypto exchanges failing?

The cryptocurrency market went through a “crypto winter” at the end of last year when prices fell and a number of crypto exchanges filed for bankruptcy in the US.

A high profile example is FTX which filed for bankruptcy in November 2022 notwithstanding pre-bankruptcy valuations in excess of $30 billion. FTX’s founder and CEO, Sam Bankman-Fried, is currently being prosecuted for fraud.

What are the considerations for an IP who is appointed in respect of an insolvent crypto exchange?

Once appointed, an IP will need to review the position with any crypto assets to determine whether the assets in question belong to a creditor or whether the assets are held on a creditor’s behalf (which would mean that the creditor would rank as an unsecured creditor).

Any IP appointed should therefore review any terms and conditions related to the assets on this question and should seek legal advice on this.

What should an IP in England and Wales do initially where there are crypto assets in an insolvency?

An IP appointed in England and Wales has a duty to collect in and realise any assets in the Estate and this includes any crypto assets given the broad definition of ‘property’ in section 436 of the Insolvency Act 1986.

Faced with a situation where crypto assets may form part of an insolvent Estate, an IP should commence an investigation into their whereabouts.

Liquidators can utilise the provisions in sections 234 — 236 Insolvency Act 1986 to apply to Court to obtain books and records, compel witnesses to give evidence or make an enquiry into a company’s dealings.

Before any application is issued, a formal legal letter should be sent to the proposed Respondent giving them reasonable time to respond.

Trustees in Bankruptcy have similar powers pursuant to sections 336 and 337 Insolvency Act 1986 to compel the bankrupt and/or witnesses to give evidence or to produce documents which may assist their investigations.

In addition (or alternatively), an IP should also look to appoint an expert who should be able to try to obtain access to the blockchain to ascertain the record of any transactions.

If the above exercises are carried out, then it may also uncover further potential recoveries!

What legal action can be taken by an IP in England and Wales?

Once crypto assets are found, then lawyers should be instructed to advise on how to take any action for their recovery.

There is case law which establishes, for the purposes of interim relief, that crypto assets such as NFTs and bitcoin constitute property for the purposes of the law of England and Wales.

Accordingly, it is possible to:-

• Obtain proprietary injunctions in respect of crypto assets;
• Obtain worldwide freezing orders in support of claims relating to crypto fraud;
• Enforce judgments against crypto assets.

How are cases dealt with in the Courts of England and Wales, are there any defining features?

The Courts have developed significant expertise in dealing with crypto assets and it is possible to bring insolvency related claims in the Insolvency and Companies List in the High Court.

IPs can also consider bringing civil claims in the Courts and these are commonly dealt with in the London Circuit Commercial Court.

The most interesting and unique feature about these cases is that very often the party making the application will attend the Court without notice to the other side. This does mean that the decisions are not binding authorities per se but the Courts do generally follow an approach which is consistent with previous interim decisions.

What Issues arise when these cases are before the Courts?

The main issue which arises for an IP is to identify whether a crypto asset exists and if so, its whereabouts. This will often require the engagement of forensic blockchain investigators.

It is possible to obtain an injunction/judgment against “persons unknown” in appropriate cases.

When making an application for an injunction without notice, the applicant has a duty of full and frank disclosure and this Is particularly relevant to digital asset disputes, see the decision in Piroozzadeh -v- Persons Unknown, Binance and others [2023] EWHC 1024 (Ch).

IPs should act quickly in any action due to the potential volatility of crypto assets and the risk that these may fall in value or dissipated/destroyed which may affect the outcome of any action and the ultimate recoveries made.

I’m an overseas IP, what can I do in respect of crypto assets in England and Wales?

If you are an overseas IP and wish to recover crypto assets in England and Wales, then you may be able to make an application to the Courts in this jurisdiction for a Recognition Order pursuant to the terms of UNCITRAL Model Law.

Broadly speaking, this will be possible in the following cases:-

• Where the owner of the crypto assets can be said to reside in the jurisdiction;
• An underlying contract specifies that the matter is to be dealt with in the English Courts or English law applies;
• The assets are located here;
• Any losses are suffered in England and Wales.

If a Recognition Order is obtained, it will give access to remedies available to litigants before the Courts of England and Wales.

If you are located in certain countries, then you may alternatively be able to apply to the Courts of England and Wales for Assistance pursuant to $426 Insolvency Act.

The Courts will usually grant assistance and this will give the office holder the option to apply English law or the law of the country where the IP is appointed (this has the scope to broaden out the remedies available).

Alternatively, if you have obtained a judgment in an overseas Court already, it is an option to apply for this to be recognized in the Courts of England and Wales so that it can be enforced in this jurisdiction.

If you would like any advice on any of the issues raised in this article, then please contact Evelyn Austin to find out what steps can be taken on al@jamesedwardassociates.com or (020 7467 39986).

The information provided in this document does not, and is not intended to constitute legal advice. Instead, all information is for general informational purposes only. Should you wish to obtain legal advice in relation to the matters raised, please do not hesitate to contact us.

Before we look at the facts of the Scottish authority it is important to remind ourselves about the law on disability.

The Law

A person is defined as having a disability if they have a physical or mental impairment which has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. They must meet the threshold as set out under section 6 (1) Equality Act 2010.

The word ‘substantial’ is important as it means more than minor or trivial and can include the time taken to complete a task. The impairment must also have a long-term effect and last at least 12 months or for the remainder of the worker’s life if terminal.

It is also not necessary for an impairment to have a medically diagnosed cause. This is on the basis that it is the effect of the impairment that matters as opposed to the cause.

The impairment also has to have a long-term adverse effect on day- to -day activities and this means things that people undertake on a regular basis. Things like attending and taking part in social activities, walking, travelling, cooking, shopping, eating. It can also include the ability to get dressed, shower, and other domestic activities that we take for granted.

Earlier this year the Equality and Human Rights Commission sent out a tweet that stated that long covid should not be treated as a disability. This surprised many and caused consternation for many, so much so in fact, that it issued a clarification statement. It stated that long covid was not a deemed disability and that not all cases of long covid will pass the disability test. They went on to also say that “This does not affect whether long covid might amount to a disability for any particular individual – it will do so if it has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities” It also recommended that employers make reasonable adjustments where necessary for those deemed to be disabled.

What is Long covid?

After being infected with Covid, many people find that their symptoms reduce within 7 days to 4 weeks. Some people on the other hand experience symptoms for longer periods of time, and in some cases many months after their first diagnosis.

The NHS suggests that Long covid can take two forms. The first is referred to as ‘Ongoing symptomatic covid’ which is where symptoms continue for more than 4 weeks but less than 12 weeks. Then there is ‘Post covid syndrome’ which is where symptoms continue for more than 12 weeks and cannot be explained by another condition.

There are in fact many symptoms of long covid and some examples are as follows:-

• Fatigue
• Brain fog (loss of concentration, loss of memory)
• Breathlessness
• Palpitations
• Insomnia
• Dizziness
• Pins and needles/numbness
• Nausea
• Loss of taste and smell
• Muscle pain/Joint pain/abdominal pain
• Diarrhoea
• Skin rashes

The Office for National Statistics also suggests that 3.1% of the UK population have symptoms of long covid and that it was greatest in people between the ages of 35 to 69.

The recent Scottish authority

This involved Mr Burke who was a caretaker at Turning Point Scotland where he tested positive for Covid-19 in November 2020. At first his symptoms were mild, but then Mr Burke developed severe headaches, fatigue, anxiety and joint pain. He had difficulty in showering and dressing himself and this would involve him having to lie down to rest from sheer fatigue and exhaustion. He was also unable to undertake domestic activities such as cooking, ironing and shopping because he had a lack of energy.

Mr Burke remained off sick from work and as a consequence his pay ceased in June 2021. Mr Burke issued a series of GP fit notes and he was sent to Occupational Health where their reports made reference to the fact that he was suffering from long covid and post viral fatigue syndrome. Initially they suggested that Mr Burke was able to return to work and that it was unlikely that he was disabled. However Mr Burke was unable to return to work because of the fatigue that he was experiencing.

Unfortunately Mr Burke was dismissed by his employer in August 2021 on the grounds of incapacity and ill-health and they cited his continuing absence from work.

The dismissal letter stated that “having reviewed the capability report including occupational health opinion closely, and taken the details of our discussion into consideration, it is my view that you remain too ill to return to work…….and there appears to be nothing further we can do to adjust your duties or work environment that would make your return more likely. In addition, there does not appear to be a potential date on which there is a likelihood of you being able to return to full duties in the future.”

As a consequence of being dismissed, Mr Burke issued proceedings in the employment tribunal including disability discrimination. One of the issues at the Preliminary Hearing stage was to determine whether Mr Burke was disabled under section 6(1) Equality Act 2010 which was one of the hurdles that he would need to satisfy in order to pursue his disability discrimination claim. Unfortunately, the employer did not concede on the issue of disability and argued that Mr Burke was not disabled in law, and so it was left to the employment judge to determine the issue.

At the Preliminary Hearing the employer suggested that Mr Burke was exaggerating his symptoms, and made reference to the brevity of his GP’s fit notes. They also suggested that the reason Mr Burke failed to return to work was to avoid an internal restructuring exercise within his team.

During the course of both Mr Burke and his daughter’s evidence, the employment judge was satisfied that they had both given evidence of his ongoing symptoms and noted that there were severe restrictions at the time, on being able to secure face-to -face consultations with a GP. The employment judge also accepted that people suffering from long covid are likely to have good days and bad days.

It was also noted that the employer’s attempt to suggest that Mr Burke was over-exaggerating did not follow the rational that was set out in the dismissal letter which stated that he was “still experiencing symptoms of extreme fatigue” and which suggested that he remained “too ill to return to work”.

The employment judge held that Mr Burke’s suffered from impairments that had an adverse effect on his day-to-day activities and that overall the effects were substantial (notwithstanding the fact that he had good and bad days). It was also held that the effect’s of Mr Burke’s condition were also likely to be long-term.

This means that now it has been held that Mr Burke’s long covid condition has now been classed as a disability his case can now proceed to a full merits hearing where his substantive claims can be heard.

[Burke -v- Turning Point Scotland [2022] ET 4112457/2021]

What is best practice for employers in dealing with workers who are suffering from long covid?

Although the Burke authority is non-binding in law, it is the second of its kind on long-covid and confirms and re-iterates the section 6(1) hurdles that need to be overcome. It is clear that not every long covid sufferer will be classed as disabled if they do not overcome those hurdles and that as is usually the position, each case will be judged on its own facts.

Overall it is important that employers should tread carefully and be aware that a worker with long covid symptoms could be disabled in law and will have employment rights that they can pursue. There is also a duty to make reasonable adjustments in law and a failure to do so can be used against an employer in a disability discrimination claim.

Here are some pragmatic tips for employers to consider when dealing with workers who have long covid or indeed any long term illness.

Investigate and communicate Gather as much information as possible about the worker’s medical condition and prognosis. Collate GP’s fitnotes, all correspondence, notes of return to work meetings. Keep the situation under constant review and ask for more information from the worker’s GP (with their consent). Take time to communicate with the worker the nature of their symptoms, and any patterns they experience, and how they feel that their symptoms are impacting on their ability to work including travel to work.

Specialist advice Consider obtaining advice from an Occupational Health specialist, or an external medical specialist to keep updated on the worker’s condition. Bear in mind that the worker’s condition may change from time to time, as will their ability to meet section 6(1) thresholds. Be careful to ensure that you accurately set out the worker’s health symptoms and ask the specialist to provide a view as to whether they are disabled making reference to the effects on day-to-day activities and whether the effects are substantial.

Follow up Where specialist advice is unclear or is contradictory with other medical advice, then do follow up and seek further medical advice.

Make adjustments Where the employer has information which suggests that the condition might be long-term then consider if any adjustments can be made, for example providing additional rest breaks, agreeing flexible working arrangements, introducing part-time hours and homeworking, changing the worker’s role and/or adjusting their workload, offering counselling, refraining from taking disciplinary action for sickness absence.

Training Provide training to managers as to how they can best handle sensitive discussions around health and how to manage workers who are suffering from long covid. Ensure that written policies are understood and followed.

Policies Review relevant policies for example equal opportunities, health and safety, reasonable adjustment, disability, sickness absence, flexible working to ensure that they are up-to-date, and are fit for purpose and above all are non-discriminatory. You could even introduce a covid policy for the workplace.

We are now seeing a number of cases being heard by employment tribunals relating to covid, and it is certain that more authorities and developments will follow. As ever it is a case of watch this space.

If you have any questions relating to long covid and long-term sickness absence in general then please contact Michael Stewart (Partner and Head of Employment) at James Edward & Associates. Tel: 020 7 467 3988 E-mail: se@jamesedwardassociates.com