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The common law rule against double proofs (in that it emanates from case law and decisions in courts, and was not laid down by statute) is that a creditor or claimant cannot benefit twice from the same claim.
For example, if a person is injured at work and wants to claim for damages against a company, they cannot make that claim if an insurance company pays up under a policy for their losses (as they would be receiving payment twice for the same incident and injury).
The insurance company, having paid the above claim, could be ‘subrogated’ into the position of the injured person and claim against the company for their loss. (See ‘Subrogation’.)
It is not unusual for a company (the ‘guarantor’) to guarantee a debt of a related company (the ‘principal debtor’) and subsequently to be asked to pay out sums owed by the principal debtor in the event of the latter’s insolvency to a third party creditor.
If the principal debtor company then goes into Liquidation and the creditor is paid by the guarantor, a claim for the same amount cannot then be made by the creditor, as they would effectively be paid twice for the same debt. Once by the guarantor and a second time by the debtor company.
[See ‘Common Law’, ‘Subrogation’ and ‘Liquidation’.]
The Trade Union and Labour Relations (Consolidation) Act 1992 (TUPER) states that when an employer is making more than 20 redundancies they must provide employees with notice of that redundancy.
Effectively, the Insolvency Practitioner has become the employer and therefore has a duty under this law (insolvency is not a ‘special circumstance’).
This duty to consult with the employees about potential redundancies is:
0 Days If there are less than 20 employees
30 Days If there are 20 to 99 employees
45 Days If there are 100+ employees
