Whilst the Supreme Court’s decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6 provides clarity on the application of limitation periods in unfair prejudice claims, it raises fresh questions for certain insolvency claims that have traditionally been thought to have limitation periods.

The Decision in Zedra

By a majority of 4-1, the Supreme Court held that unfair prejudice claims under section 994 of the Companies Act 2006 are not subject to any limitation period. In reaching this conclusion, it rejected the application of both:

  • Section 8 Limitation Act 1980 (applies a 12-year limitation period where the remedy is non-monetary and where actions are based on a document executed as a deed or based on a statutory obligation); and
  • Section 9 Limitation Act 1980 (applies a 6-year limitation period to actions to recover a sum of money).

The Supreme Court emphasised that not all statutory claims fall within the Limitation Act simply because they arise under statute. Instead, consideration should be given to whether the court has a broad discretion in relation to the appropriate remedy.

Key Reasoning

Section 8 was held not to apply because an “action upon a speciality” is in essence an action to enforce an obligation created by deed or statute. Section 994 creates no such obligations; it simply empowers the court to grant discretionary relief where a relevant state of affairs exists.

Section 9 was also found to be inapplicable. This is because whilst a petitioner may seek a specific remedy, including monetary relief, it is ultimately for the court to determine what remedy, if any, is appropriate.

In reviewing earlier authorities, the majority expressed the view that section 9 had been wrongly applied in insolvency cases involving similar discretionary regimes including:

  • Re Priory Garage (concerning transactions at an undervalue and voidable preferences); and
  • Hill v Spread Trustee Co (concerning transactions defrauding creditors).[1]

However, these decisions were not formally overruled.

Implications for Insolvency Claims

The following insolvency claims share the same core features of section 994, in that they allow monetary and non-monetary relief, are fact-specific, and confer a wide judicial discretion on the court:

  • Section 423 (transactions defrauding creditors);
  • Section 238 (transactions at an undervalue);
  • Section 239 (preferences); and,
  • Sections 339-342 (individual bankruptcy equivalents, for transactions at an undervalue and preferences).

In light of the Supreme Court’s analysis, it appears that the six-year limitation period under section 9 no longer applies to these insolvency claims, but it is less certain whether the 12-year limitation period under section 8, will apply.

When considering the application of section 8, the Supreme Court observed that the provisions in sections 238, 239 and 423 “entitled the claimant to bring proceedings for relief either where certain transactions had taken place or in respect of a past or present state of affairs”. On that basis, section 8 had previously been treated as applicable because the statutory right to bring insolvency claims were treated as an “action upon speciality”. The Supreme Court made clear that this previous interpretation had been wrongly relied on.  

Instead, as noted above, the Supreme Court held that section 8 applies to an action to enforce an obligation created by deed or statute, which insolvency claims are arguably not. Applying this narrower interpretation, it seems unlikely that section 8 will apply to insolvency claims. This is because, similarly to section 994, these insolvency provisions do not create or enforce substantive obligations; rather, they entitle a claimant to bring proceedings in which the court is empowered to “make such order as it thinks fit”. This discretionary and remedial jurisdiction is materially different and points against characterisation as an action upon a specialty.

The Supreme Court, nevertheless, expressly left open the possibility that section 8 might be justified on some other ground. Accordingly, on the basis of the Supreme Court’s reasoning, and unless and until a claim is advanced to the contrary seeking to justify section 8 on a different footing, it is likely that section 8 will also not apply to insolvency claims.

In those circumstances, any time bar would instead be determined by the court’s discretionary assessment of any delay and fairness. Relevant factors that the court will take into account include the length of the delay; conduct of the parties; the nature and extent of any prejudice and the degree to which the office-holder caused that prejudice. The court is unlikely to grant relief where delay has caused substantial prejudice or detriment to the respondent or where it would otherwise be unequitable do so. This assessment will be case-specific and in some cases, the court may in theory even impose a time bar shorter than those previously prescribed by the Limitation Act.

Practical Implications for Officeholders

In the absence of a clear statutory time bar, this increased uncertainty may encourage litigation as parties seek to test the boundaries of the court’s discretion. Officeholders may therefore wish to consider revisiting claims previously discounted on limitation grounds to ensure potential recoveries for creditors have not been overlooked.

For ongoing investigations, there may be greater flexibility to explore claims or secure funding.

However, officeholders should remain alert to the risks of delay. Prolonged inaction may give rise to discretionary defences and should not lead respondents to the assumption that future proceedings will never be commenced. Office-holders should continue to investigate claims promptly and carefully document reasons for any delay, assessing as they do so, the likelihood of whether (further) delay will cause the intended defendant any prejudice.

[1] Re Priory Garage (Walthamstow) Ltd [2001] BPIR 144 and Hill v Spread Trustee Co Ltd [2006] EWCA Civ 542