Where an Insolvency Practitioner requests a file, then, in short, you have to provide it, and you cannot exercise a lien over the file. You also cannot charge to provide the file. Before sending any file you should first discuss the matter with the General Counsel. It is often best to call the Insolvency Practitioner and see if you can satisfy their curiosity over the phone. They seldom want the file, just to know if they need to read it to see if it might assist them in finding assets, including whether to challenge your bill and get money back from us.
For corporate insolvencies, the Liquidators or Administrators are office holders. They have the company's power to ask for the company's documents. You have to provide them. In this respect, if you don't, it might be SRA misconduct and they might seek a court order under S 236 of the Insolvency Act 1986 to obtain them. For companies which have entered insolvency proceedings within 12 months of the end of our retainer, note the s235 statutory duty to co-operate (S 235 of the Insolvency Act 1986).
For personal bankruptcies, the position is more nuanced (Ss. 311 and 312 of the Insolvency Act 1986). The Trustee does not control the bankrupt, just has rights to the bankrupt's papers. This engages privilege. In such a case you should ask the client what is to be done with their file. Where matters are personal to the client and the client does not want you to provide the file, then you should contact the General Counsel. This article from the Law Society Gazette and also this article and this article outline some of the technical issues in this area. You should consider involving a colleague with specialist knowledge in this area.
Please also refer to the section on Insolvency of clients