High Court grants permission to challenge administrators’ fees and expenses

In Scanlon v O’Hara [2026] EWHC 1927 (Ch), the High Court has granted permission for a challenge to administrators’ fees and expenses of almost £1.9 million incurred within the first 12 months of a special administration.

Nvayo Limited was an electronic money institution regulated by the FCA. It went into special administration under the Payment and Electronic Money Institution Insolvency Regulations 2021. The majority of the fees and expenses incurred in the first year of special administration related to “objective 1” of returning safeguarded funds to customers.

The question that arose was whether a person who was the company’s largest unsecured creditor, but who only represented about 0.1% of customer claims to safeguarded funds, could challenge the fees and expenses incurred in respect of “objective 1” even though the statutory threshold for such a challenge by a customer (without the permission of the court) was with the support of 10% of customer claims.

The administrators opposed the grant of permission on the basis that the applicant should not be entitled to challenge costs relating to customers in order to further his interests as a creditor, because that would allow the exercise of his rights of challenge for a collateral purpose and not bona fide in the interests of the class of customers.

The Court found that it should favour assisting a party who seeks to challenge office holder remuneration on a reasoned as opposed to a frivolous basis, and that if there was to be any scrutiny of fees and expenses the applicant was the only person likely to instigate it. The Court therefore granted permission to challenge fees and expenses relating to returning safeguarded funds to customers.

The Court also granted permission to challenge fees and expenses under the inherent jurisdiction of the court and under paragraph 74 of Schedule B1, confirming the availability of alternative jurisdictional gateways to challenge fees and expenses in appropriate cases.

Tim Matthewson acted for the successful applicant, instructed by Kingsley Napley LLP.

Read the full judgment