Re Harris Simons Construction Ltd [1989] 1 WLR 368 is a UK insolvency law case concerning the administration procedure when a company is unable to repay its debts.

Berkley said if an administration order were made it would give enough funding to let the company complete four contracts on condition it remove itself from the sites that were in dispute.

The question was whether the court should exercise its jurisdiction and whether the order would be likely to achieve the specified purposes of administration (now found in the Insolvency Act 1986, Schedule B1, para 3).

But this is a new statute on which the judges of the Companies Court are still feeling their way to a settled practice and I therefore think I should say that in my view he set the standard of probability too high.

It cannot be a misuse of language to say that something is likely without intending to suggest that the probability of its happening exceeds 0.5, as in “I think that the favourite, Golden Spurs at 5–1, is likely to win the Derby.” Secondly, the section requires the court to be “satisfied” of the company's actual or likely insolvency but only to “consider” that the order would be likely to achieve one of the stated purposes.

It is therefore not unlikely that the legislature intended to set a modest threshold of probability to found jurisdiction and to rely on the court's discretion not to make orders in cases in which, weighing all the circumstances, it seemed inappropriate to do so.

508, which recommended *371 the introduction of administratorship, said that the new procedure was likely to be beneficial “only in cases where there is a business of sufficient substance to justify the expense of an administration, and where there is a real prospect of returning to profitability or selling as a going concern.”Elsewhere the report speaks of an order being made if there is a “reasonable possibility” of a scheme of reconstruction.

For my part, therefore, I would hold that the requirements of section 8(1)(b) are satisfied if the court considers that there is a real prospect that one or more of the stated purposes may be achieved.

On the facts as they appear from the evidence before me, I think there is a real prospect that an administration order, coupled with the agreement with Berkley House, will enable the whole or part of the company's undertaking to survive or at least enable the administrator to effect a more advantageous realisation of the assets than would be effected in a winding up.