The court has provided guidance on how to protect personal representatives in potentially insolvent estates in Wedgwood v Hosein and another [2024]. 

The decision of Master Marsh (sitting in retirement) concerns the administration of a potentially insolvent estate and the defence (by the administrator) of a third party claim which, if successful, would mean the estate would be insolvent. The administrator in this case had applied to the court for directions for the conduct of third party claims (commonly known as Beddoe relief) and for an order under section 284 of the Insolvency Act 1986 ratifying the costs incurred in administering the estate. 

The decision makes clear that, when faced with a potentially insolvent estate, a PR must conduct a balancing act in considering the interests of both creditors and  beneficiaries and should apply the same test in deciding whether to grant Beddoe relief and ratification of payments made by a PR under the Insolvency Act. To do otherwise would place a PR in an impossible position. 

The court also had to consider when, if ever, it is likely to be appropriate to encroach on the confidentiality of discussions at mediation and place this as evidence before the court in a Beddoe application - the answer (for now) seems like that is doubtful. 

https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2024/1836.html&query=(wedgwood)+AND+(v)+AND+(hosein)