Written by Jeremy Boyle
Last Updated: 27 August, 2026A winding-up petition is one of the most urgent situations I see directors face, and one of the most powerful tools available to a creditor. In my experience, the outcome almost always comes down to how quickly the right action is taken at each stage.
In this guide, I have set out the winding up petition procedure step by step, from pre-petition through to the court hearing and beyond. Whether you have received a winding up petition or are considering issuing one, my aim is to give you a clear picture of what happens and what your options are.
The Bourlakova Judgment
The Bourlakova judgment was handed down shortly before the Court of Appeal’s decision in Salinas. The application arose in long-running litigation concerning substantial assets said to derive from the late Oleg Bourlakov. Some of the defendants sought disclosure of communications with private investigators, arguing that legal professional privilege had been displaced by the iniquity exception because the claimants had, they alleged, obtained confidential and privileged information through enquiry agents.
Richards J therefore had to examine the intersection between legal professional privilege, civil fraud investigation and private intelligence gathering. The applicants contended that the claimants, assisted by their solicitors and external investigators, had engaged in conduct sufficiently improper to remove the ordinary protection afforded to privileged communications.
The central issue was whether the alleged conduct fell within the iniquity exception. That exception is not engaged merely because a party has behaved unattractively, used intrusive methods or ultimately come into possession of confidential material. The conduct must be sufficiently serious to take the communications outside the ordinary protection of legal professional privilege.
The decision confirms that evidence gathering by investigators is not inherently objectionable. However, clients and solicitors must be able to show that the investigation was authorised and supervised on a lawful basis, that the intended scope was understood and recorded, and that the parties did not deliberately set out to obtain privileged material. The case also illustrates the continuing difficulty caused by covert recordings and material obtained from third parties, including whistleblowers and sources in other jurisdictions.
On the facts, the applicants argued that the claimants had obtained confidential and privileged information over several years through enquiry agents. They submitted that the claimants’ communications with solicitors and investigators should therefore lose privilege. Richards J rejected that broad approach.
The judge held that it was not enough to prove that some other person may have acted unlawfully. Nor was there a rule that it is automatically iniquitous to put in train an investigation which results in confidential information being obtained without consent. Such a rule would risk creating a chilling effect on legitimate fraud investigations.
The court was careful to preserve the high status of legal professional privilege. A party seeking to displace privilege must clear a high evidential and legal hurdle. Suspicion, aggressive investigative tactics, expense, intrusion or the fact that information was obtained without consent will not, without more, establish iniquity.
That conclusion matters in fraud cases. If every attempt to obtain confidential information were treated as iniquitous, suspected fraudsters would be able to shield wrongdoing simply by refusing to provide incriminating material voluntarily. Richards J preferred a fact-sensitive approach, focusing on what the claimants and their advisers knew, intended, authorised and believed at the time.
The court was also reluctant to make findings about disputed allegations concerning third-party conduct where the relevant investigators were not before the court. That caution is important: the iniquity exception is a serious incursion into privilege and should not be applied on a speculative or insufficiently tested factual basis.
1. The state of mind of the litigant matters
One of the most important aspects of the judgment is the court’s emphasis on the belief and intention of those alleged to have acted iniquitously. Richards J considered whether the claimants and their solicitors believed the investigations were being conducted lawfully and whether they were deliberately engaging in improper conduct. Clear records of instructions, scope, source handling and privilege safeguards will therefore be central to any later attempt to demonstrate that an investigation remained within lawful and proper bounds.
2. A litigant is not automatically responsible for every unlawful act of a third-party investigator
The judgment draws a distinction between direct wrongdoing by a litigant or solicitor and misconduct committed independently by a third party. The court will examine what was actually agreed, authorised and understood. That does not give clients or solicitors licence to turn a blind eye. It makes contemporaneous supervision and documented limits even more important: the more sensitive the investigation, the more important it is to record what the investigator may and may not do.
The judgment may nonetheless leave difficult questions for future cases, particularly where covert recordings are involved or where a party benefits from information gathered by methods it did not expressly authorise. The safer course is to ensure that investigators are expressly prohibited from providing unlawful evidence, obtaining privileged material and required to escalate any risk of privilege being breached immediately.
3. The court recognises the legitimate role of investigators and whistleblowers
Of particular significance is the judge’s rejection of a proposed rule that it is inherently iniquitous to put in train a process which results in confidential information being obtained without consent. The court recognised that fraud investigations frequently depend upon sources, insiders, leaks and investigators operating across borders. A blanket rule would risk preventing victims of fraud from obtaining evidence needed to pursue claims.
That said, the decision should not be read as reducing the importance of privacy, confidentiality or privilege. It is a recognition that the court must balance competing public interests: the protection of legal professional privilege and the need for effective investigation of serious wrongdoing.
4. The decisive dividing line is evidence gathering, not privilege hunting
The applicants alleged that the claimants were engaged in a programme of obtaining privileged information belonging to their opponents. Richards J rejected that characterisation on the evidence before him. The distinction is critical. Investigators may encounter confidential or even potentially privileged material during broader investigations, but that is fundamentally different from deliberately targeting privileged communications for litigation advantage.
The distinction is important. The court recognised that investigators may encounter privileged material during broader enquiries, but that is fundamentally different from deliberately targeting privileged communications in order to gain an unfair litigation advantage.
The Salinas Appeal
The Court of Appeal’s decision in Salinas Pliego v Astor Asset Management 3 Ltd [2026] EWCA Civ 940 provides the sharper counterpoint. The claimants alleged that they were the victims of a substantial fraud connected with a stock lending agreement. They said they had advanced approximately US$115 million and transferred shares said to be worth around US$415 million in reliance on representations that the defendants were connected with the Astor family and a legitimate financial institution.
The claimants had obtained worldwide freezing orders in support of the fraud claim. The appeal, however, focused not on the underlying merits (it was agreed that there was the overall fraud claim had sufficient merit to justify a freezing order), but on the consequences of a covert operation conducted by Black Cube, an investigations firm instructed by a company associated with the claimants.
Black Cube’s operative posed as a potential new client and targeted a solicitor who had been acting for the defendants. The fictitious approach was designed to draw the solicitor into discussing the real litigation. Meetings were covertly recorded and information was obtained about the defendants’ litigation and settlement strategy, the perceived impact of the freezing orders and other sensitive matters. The recordings were later deployed by the claimants in support of an application for summary judgment.
The Court of Appeal was unequivocal. Deliberately seeking to obtain an opponent’s privileged or confidential litigation information by deception is a serious abuse of process. Males LJ described the conduct as a very serious abuse and a form of corruption of the litigation process. The court rejected the suggestion that abuse could only be found if a fair trial had been rendered impossible. Some conduct is abusive because of its nature and its connection with the proceedings, even if the court can still manage the case to trial.
The court also rejected the argument that the possible application of the iniquity exception could excuse the operation. Even if, with hindsight, some information might arguably have fallen outside privilege, the claimants could not know that when the operation was authorised. The wrong was the dishonest attempt to obtain an opponent’s litigation secrets for tactical advantage. That is privilege hunting in its clearest form.
It is useful to distinguish the first instance approach from that of the Court of Appeal. The Deputy High Court Judge, Stephen Houseman KC, accepted that the Black Cube operation involved serious misconduct and constituted an abuse of process, but treated the immediate procedural consequence more narrowly: the claimants were deprived of the benefit of using the material for their summary judgment application, and the broader questions of admissibility, privilege and the iniquity exception were left for further consideration. The Court of Appeal took a more principled and more severe view of the unlawfulness. It was not necessary to decide definitively whether every piece of information obtained was privileged, or whether some of it might ultimately fall within the iniquity exception. The wrongdoing lay in the deliberate plan to deceive an opponent’s solicitor in order to obtain confidential litigation information. For Males LJ, that was not merely an evidential irregularity capable of being managed at a later hearing; it was a serious corruption of the litigation process itself, which justified discharging the freezing orders.
The sanction imposed is also important. The Court of Appeal did not strike out the underlying fraud claim. Strike out remains an exceptional remedy, particularly where serious allegations of fraud should, if possible, be determined on their merits. However, the court discharged the freezing orders. A party committing a serious abuse of process could not expect to retain the benefit of a discretionary remedy obtained from the court. The message is practical and severe: misconduct directed at privileged material may not destroy the claim, but it can deprive the claimant of powerful interim relief.
The contrast with Bourlakova is instructive. In Bourlakova, the court was not prepared to infer iniquity from the mere use of investigators, disputed allegations of unlawful third-party conduct or the existence of confidential material. In Salinas, by contrast, the operation was deliberately designed to target the opponent’s solicitor and extract litigation strategy through deception. The first case preserves space for legitimate investigation; the second marks the boundary which must not be crossed.
Three key lessons for investigators and lawyers
First, define the purpose of the investigation and document the limits. Investigators should be instructed to gather admissible evidence, identify assets, locate witnesses or test factual propositions. They should not be asked — expressly or implicitly — to obtain privileged communications, litigation strategy or confidential legal advice. Written instructions should identify prohibited conduct, escalation routes and privilege safeguards. Solicitors should assume that those instructions may one day be scrutinised by the court.
Secondly, solicitors should supervise investigators actively rather than at arm’s length through client intermediaries. The courts will look at what the client and lawyers knew, intended, authorised and did when concerns arose. It is not enough to rely on an investigator’s assurance that the work is lawful. Lawyers should require a clear methodology, maintain a record of instructions, question the source of sensitive material and act immediately if privileged or confidential opponent material appears to have been obtained. Having a third party to filter evidence to avoid the privileged information being disclosed is an important protective step.
Thirdly, clients cannot assume that a strong fraud claim will be enable them to keep freezing order relief where there is evidence of abusive conduct. Salinas shows that even where the court does not strike out the claim, serious litigation misconduct can have immediate and damaging consequences. Freezing orders, search orders and other interim remedies are discretionary. A claimant seeking those remedies must come to court with clean hands, and a privilege-hunting operation may lead the court to remove the very protection the claimant most needs.
Concluding Remarks
These two decisions when read together make for a useful reminder as to how different judges can come to different views on the impact of lawfulness on a claim and its ability to avoid being struck out so that it can progress to trial. The Judgments do not signal hostility to private investigators in fraud litigation. They do, however, make clear that the court will distinguish sharply between lawful evidence gathering and deliberate attempts to penetrate the opponent’s privileged legal camp.
The English court is seeking to balance two public interests: preserving legal professional privilege as a fundamental condition of the administration of justice, and permitting victims of suspected fraud to investigate wrongdoing effectively. Bourlakova guards against an approach which would chill legitimate investigation. Salinas confirms that deception aimed at an opponent’s solicitor and privileged strategy is an abuse of process which attracts real procedural consequences.
For solicitors, barristers and investigators, the practical message is straightforward. Fraud work often requires speed, discretion and ingenuity, but those qualities must operate within a documented legal framework. The investigation must be aimed at evidence, not privileged advantage. If that line is crossed, the court may not merely criticise the conduct; it may remove the procedural remedies on which the fraud claim depends.
