Data Protection Act – Obligations of Liquidators

by Reed Smith

A judgment recently handed down from the High Court clarifies the obligations of liquidators under the Data Protection Act 1998, providing them with greater personal protection from fines or other sanctions.

Reed Smith acted for the liquidators in their application for directions.


The Data Protection Act 1998 (the “Act”) imposes various obligations on persons who collect, store and process individuals’ data. These obligations include making an individual’s information available to them upon their request (a data subject access request, or DSAR). Those persons classed as data controllers under the Act face penalties if DSARs are not responded to appropriately.

Until now, it has been largely accepted that upon taking office as a liquidator, the liquidator personally becomes a data controller in respect of any data held by the company and, therefore, assumes the statutory responsibilities as set out in the Act.

Southern Pacific Personal Loans Limited

Southern Pacific Personal Loans Limited (SPPL or the “Company”), a company within the Lehman Group of companies, entered voluntary liquidation in September 2012. SPPL, until it ceased originations in 2007, was in the business of providing personal loans to individuals resident in England, Wales and Scotland, and, therefore, held large amounts of personal information about these individuals.

Both prior to and after SPPL’s entry into liquidation, DSARs were being received each month. The cost of dealing with the DSARs during the liquidation has been depleting the funds otherwise available to distribute to SPPL’s creditors.

The liquidators applied to the court for directions as to their responsibilities under the Act, including a determination on whether they were data controllers in respect of data held by SPPL prior to its liquidation.

In his judgment, handed down last Thursday, David Richards J held that the liquidators were not data controllers in respect of such data. In reaching this decision, weight was given to the liquidators’ position as agents of the Company, rather than individuals acting in their own capacity, and the liquidators’ function replacing that of the directors of the Company, directors not being considered to be data controllers.

David Richards J went on to focus on what should be done with such data held by SPPL. In his considerations, weight was given to the fifth data protection principle; that personal data shall not be kept for longer than is necessary for the purpose or purposes for which it was processed. As SPPL now only holds data relating to fully redeemed loans, prima facie the information should be destroyed as soon as possible. However, two caveats to this general principle were expressed by the court: (i) that sufficient data should be retained to deal with DSARs that have been/are received in the liquidation; and (ii) that sufficient data should be retained to deal with claims that have been/are received in the liquidation, both prior to the disposal of such data.


This judgment has positive implications, and is good news for insolvency practitioners, who are no longer personally responsible for compliance with the provisions of the Act in respect of the data held, prior to liquidation, by the companies to which they are appointed. David Richards J made clear that his judgment was limited to liquidators under a voluntary liquidation, however he did comment that he did not see that there was any material difference in the case of a compulsory liquidation. Although this was not addressed by the judge, the position of an administrator is likely to be no different.

However, prior to disposing of data held by companies to which they are appointed, insolvency practitioners should still exercise caution. The fifth data protection principle does not give any guidance as to how long it is “necessary” to hold data, and insolvency practitioners will need to consider the particular circumstances of the company in question before taking steps to dispose of any personal data.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reed Smith | Attorney Advertising

Written by:

Reed Smith

Reed Smith on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.