The Court of Appeal (overturning the High Court decision) has held that protective awards, made after the date of liquidation in respect of a failure to consult about collective redundancies that took place prior to the date of liquidation, are provable debts in the liquidation. Applying the guidance in GMB v Susie Radin, the Court found that as there had been a total failure to consult in this case, there was no real discretion for the tribunal not to make the full protective awards. The protective awards were therefore contingent liabilities of the company which existed before the liquidation, when the failure to consult occurred, and thus fell within Rule 13.12(1)(b) of the Insolvency Rules 1986.

This means that protective awards may be paid out of the company´s assets and not by the Secretary of State.