Preservation and Destruction of Records in Investigation Cases

Chapter 10

July 2006

10.38 General

The official receiver will always need to bear in mind the possibility that the records concerned may, although no longer required for his/her purposes, be needed for other reasons, perhaps not directly involving him/her. Reference must be made to the details contained in Part 6 of this chapter when considering whether the records of an insolvent should be preserved or destroyed.

In addition for cases which are marked FURTHER INVESTIGATION or progress to the submission of a statement of facts, disqualification or bankruptcy restriction report, the provisions of the CPI 1996 as set out in paragraph 10.40 below must be adhered to.

10.39 Records not to be annotated

Company or partnership books or those used in the business of a bankrupt should not be ruled off after the last entry in them or otherwise annotated, either by the official receiver or his staff or by directors, partners, the bankrupt or accountants preparing statements of affairs, etc.

10.40 Further enquiry cases

In all Investigation Register cases the official receiver must not destroy, or consent to the destruction of, any accounting or other records until all prosecution, disqualification or bankruptcy restriction proceedings have been disposed of, including appeals, or until the case has been written off for further investigation purposes. It is essential that case records are marked with this inhibition and storage contractors notified specifically that records are to be retained until further notice (see paragraph 10.33). The records must be preserved for the period set out in paragraphs 10.41 to 10.44 depending on the circumstances of the case.

10.41 Records connected to investigation/prosecution cases

The Code of Practice issued by the Home Office in connection with the CPI 1996 makes specific provision for the preservation of documents connected with a criminal investigation and prosecution. The main criteria likely to apply to cases reported by the official receiver are:

  1. all material must be retained until a decision is taken whether to institute proceedings against a person for an offence,

  2. if a criminal investigation results in proceedings being instituted, all material must be retained at least until the accused is acquitted or convicted or the prosecutor decides not to proceed with the case,

  3. where the accused is convicted, all material which may be relevant must be retained at least until either:

    a. six months from the date of conviction ,

    b. the release of the accused from custody, if a custodial sentence is imposed and the accused is sent to prison (i.e. the sentence is not suspended), or

    c. the period of suspension is expired, if a custodial sentence is imposed but is suspended,

whichever is the longer, i.e. the material must always be preserved for at least 6 months after conviction,

  1. if there is an appeal against conviction, all material must be retained until the appeal is determined,

  2. similarly, if the Criminal Cases Review Commission is considering an application at that point in time, all material which may be relevant must be retained at least until the Commission decides not to refer the case to the Court of Appeal or until the Court of Appeal determines the appeal resulting from the reference by the Commission.

Since it is unlikely that the official receiver will be notified of dates of release from custody (as per 3(b) above), it should be assumed for preservation purposes that custody will last for the whole of the length of the sentence imposed. Suitable entries should be made on LOIS and on the official receiver’s file to ensure that records are preserved for the appropriate period.

10.42 Disqualification proceedings (amended February 2009)

There is no legislative requirement relating to the preservation of a company’s accounting records following the making of a disqualification order or the provision of a disqualification undertaking. Unused material which was available at the time of any hearing cannot be brought into evidence at the time of a subsequent appeal. Before destroying the accounting records, the official receiver should consider the following matters:

  1. The records should be preserved at least until the time within which an appeal is permitted has elapsed i.e. 4 weeks from the date on which the judgment or order of the court is sealed,
  2. A disqualified director may obtain leave to appeal out of time (which extends the period as set out above),
  3. In a case where an undertaking has been provided the defendant is free at any stage to make an application to vary the disqualification undertaking [note 3],
  4. The records could be relevant to an application made for leave to act as a director [note 1],
  5. The records could be relevant to an application for disqualification made by the Office of Fair Trading (OFT) or other specified regulator [note 2].

Dependant upon the case involved, the official receiver should consider preserving the accounting records for at least 6 months after the making of the disqualification order or the provision of an undertaking. In a high profile or contentious case, or if there is information to suggest that an application for leave to act as a director will be made [note 1], the official receiver may consider it preferable to retain the records for a longer period such as 12 months. The decision by the official receiver regarding the length of time that the records should be kept should be made after considering the factors in a case.

10.43 Disqualification cases - where an insolvency practitioner is liquidator

When an insolvency practitioner disqualification case is dealt with by the official receiver and accounting records are in the possession of the official receiver the official receiver should take steps to verify whether the liquidator is still in office or whether the company has been dissolved. If either (or both) events have occurred the records should be destroyed in accordance with paragraph 10.42.

Where neither event has occurred the official receiver has an obligation to return the records to the liquidator. There is no obligation on the liquidator to accept the records. If the liquidator does not respond to the official receiver's invitation to collect the records the official receiver should write a final letter confirming that the official receiver's enquiries are concluded and that he/she has no further need for the records. If no response is received the records should be destroyed, the costs of destruction being absorbed in the official receiver's general administration fee (See Chapter 36, Estate Accounting, paragraph 36.8).

10.44 Bankruptcy restriction order cases (amended February 2009)

There is currently no fixed policy on the destruction of records where bankruptcy restriction order proceedings have been taken or a bankruptcy restriction order has been made or an undertaking has been agreed. It is suggested that the official receiver follow similar guidelines to those in place for disqualification orders/undertakings (see paragraph 10.42) until a policy is agreed.


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