PART 2
December 2008
TRACING INSPECTIONS
8.24 What is a tracing inspection?
A tracing inspection may be defined as a visit by the official receiver to an address that has been disclosed in the winding up or bankruptcy order, or discovered by the official receiver during the course of his/her inquiries for the purpose of ascertaining the whereabouts of the director or bankrupt, and establishing initial contact. For general information on action to take to prepare for an inspection, and items to take see Part 1.
8.25 Purpose of a tracing inspection
A tracing inspection is normally carried out in cases where co-operation from a director or bankrupt has not been achieved at the initial stages, and they have also failed to attend one or more interview. The purpose of the inspection is to ascertain the whereabouts of the director or bankrupt, and establish initial contact. The official receiver must attempt to trace a director or bankrupt to gather sufficient details to administer the case, and carry out his/her statutory duties. For information on the official receiver’s statutory duty to investigate, see paragraph 8.4.
8.26 Why is a tracing inspection necessary? – Company cases
The aim of the initial contact with the officer(s) of a company is to obtain sufficient information to ensure that the official receiver is able to protect the estate and minimise risks without repeating the questions in the PIQC. Contact may also help to ensure continued co-operation of the company officer.
The purpose of any enquiries made by the official receiver shortly after the making of a winding-up order is to:
Where contact with the company’s officers has not been made a tracing inspection will be necessary to establish the above information.
It may not be necessary to undertake a tracing inspection on other non-cooperative directors, if at least one director has co-operated, provided sufficient information, and there are no matters of concern.
8.27 Why is a tracing inspection necessary? – Bankruptcy cases
In a bankruptcy case, a tracing inspection is most likely to be needed on an order made on a creditor’s petition. In a debtor’s petition case, co-operation is likely to be offered by the bankrupt at the outset.
The purpose of any enquiries made by the official receiver shortly after the making of a bankruptcy order is to:
Where contact has not been made prior to a tracing inspection, establishing these things will be the purpose of the inspection.
8.28 Tracing inspection to establish ‘centre of main interest’ (COMI) in cases of foreign nationals
In some cases, nationals of European Union Member States outside of the UK may move to England or Wales to file a bankruptcy petition and take advantage of more favourable insolvency legislation. The EC Regulation requires main proceedings to be opened where the debtor’s COMI is situated (see Chapter 41, paragraph 41.61). Where a foreign national who appears to have been resident in the UK for less than 12 months and whose debts all appear to be outside the UK, has become bankrupt; the official receiver may wish to consider an inspection to establish whether the bankrupt is, or ever has been, actually resident in the UK.
Where it is suspected that the debtor does not reside in the UK it may be necessary to inspect the residential/trading address given on the petition/bankruptcy order to ascertain whether he/she is present or in control of that address. In some instances a debtor may be using an accommodation address provided by a company who is assisting them on becoming bankrupt in the UK. See Chapter 41, Part 5, for guidance on dealing with a case where it is found that the bankrupt is not resident in the UK.
8.29 Timing of tracing inspection
When a decision is made to carry out a tracing inspection, it should be carried out as soon as reasonably possible. Offices may want to consider whether it would be more cost effective to go out to the director/bankrupt’s address after a first missed appointment, rather than automatically issuing a second and potentially third appointment letter; it may elicit contact at an earlier stage.
On a company tracing inspection, it is normal to firstly visit the company trading addresses, followed by the registered office (if applicable) to confirm whether trading has ceased, before finally visiting the addresses of the company officers. If there is already confirmation that the company has ceased to trade prior to the inspection, it is appropriate to visit the home address of the director first.
On a bankruptcy tracing inspection, it is normal to visit the most recent address disclosed on the bankruptcy order first unless there is a reason to do otherwise (such as information received by the official receiver disclosing a different address).
8.30 Tracing inspections prior to public examination
If the whereabouts of an individual is unknown, a tracing inspection should always be carried out prior to a public examination being held. This will ensure that the official receiver can demonstrate to the court that all possible action has been taken to trace the individual. See Chapter 13, paragraph 13.4 deals with non co-operation, and Chapter 14, for further information on public examination.
8.31 Location of tracing inspection
In a company case, a tracing inspection is likely to be at the address(es) of one or more of the directors as well as the companies last trading address(es) and registered office. It will not be necessary to visit the registered office if contact has already been made with that address, for example, when the registered office is also the address of the accountant or solicitor.
In bankruptcy a tracing inspection should take place in respect of the most recent address(es) for the bankrupt disclosed in the bankruptcy order or at an address disclosed to the official receiver during the course of enquiries made.
8.32 Research to determine locations for tracing inspection
(Amended November 2012)
Prior to carrying out a tracing inspection, the examiner should ensure that they have attempted to contact the individual concerned through all available means. This is likely to include, but should not be limited to the following sources of information:
(a) An Experian search which will give details of address history, telephone numbers, voters roll information and outstanding judgements (see paragraph 3.34 or 4.47);
(b) A land registry search on all addresses available for the insolvent and/or officers to ascertain ownership of the property (see paragraph 4.48);
(c) The petitioning creditor and/or solicitor (see paragraph 3.33 and 4.32);
(d) Any accountant and/or solicitor traced for the insolvent;
(e) A bankruptcy search and/or companies house search (see paragraphs 3.39 and 4.46).
This is to ensure that all potential addresses are discovered prior to the inspection, and minimise the possible need for a further inspection at a later date. It will also increase the chances of locating the insolvent or officer whilst on the inspection.
8.33 Action to take at each address
When attending each address discovered for the insolvent or company officer, an assessment should be made of the premises and the area, prior to getting out of the vehicle if possible. Notes should be made on the type of property, condition, whether it appears to be occupied (for example are there lights on or windows open), if it is for sale details of the estate agents should be taken from the ‘for sale’ board. A note should also be made of any vehicle parked at the address, including the vehicles registration marks, make and model, so that a search may be carried out with DVLA on return to the office if considered necessary.
The examiner should then knock on the door of the address visited. If there is no answer, an appointment pack or letter (as appropriate) should be posted through the letterbox, and the neighbours visited instead, see paragraph 8.36. See Part 3 for guidance on staff safety, and when it is appropriate to enter residential premises.
8.34 Contact with a company officer
If a company officer is found, then some basic information regarding the company should be confirmed. They should also be served with a copy of the winding-up order, and an appointment pack by hand. It should be ascertained whether they intend to attend the interview, and if not why not. If they are uncooperative and state they will not be attending the interview, the examiner should make them aware of the requirement on them to co-operate, and the possibility that a public examination may be held [note 1]. The examiner might feel it appropriate to suggest that the officer seek some independent legal advice.
If a bankrupt is found, then some basic information regarding their affairs should be confirmed. They should be served with a copy of the bankruptcy order, and an appointment pack by hand. Enquiries should be made as to whether they are going to attend the interview, and if not why not. If they are uncooperative and state they will not be attending the interview, the examiner should make them aware of the requirement on them to co-operate, and the possibility that a public examination may be held [note 2]. The examiner might feel it appropriate to suggest that they seek some independent legal advice.
(Amended January 2013)
If there is no answer at the insolvent’s address, then the examiner should knock on the doors of the nearest neighbours. If a neighbour answers the door, mention should not be made of the bankruptcy/liquidation, but the warrant card should be shown and the examiner should introduce themselves as an employee of the Department for Business Innovation and Skills. Enquiries should be made as to whether {name of bankrupt/company officer} still lives at said address, and when they are likely to return, when they last saw them. It may also be useful to obtain a description of the officer/bankrupt if further addresses are to be visited. If they no longer live there, the examiner should enquire as to when they left and if they have a forwarding address, or phone number.
8.37 Action following tracing inspection
Immediately following the tracing inspection, the examiner should call the office to confirm they have finished and if/what time they expect to return to the office.
When next in the office the examiner should write up a report of the inspection detailing the addresses visited, what was found and who was spoken to. This should be signed and dated with both the date of the inspection, and the date of the report.
(Amended March 2013)
Following a tracing inspection, if it is believed that the company officer or bankrupt is evading the official receiver but that they can be traced consideration should be given to the employment of tracing agents. This should be agreed on a case-by-case basis by the assistant official receiver in exceptional circumstances only, e.g. when there is evidence of misconduct by the insolvent or it is strongly suspected that misconduct has occurred.
Guidance on instructing tracing agents can be found in paragraph 8.38A.
8.38A Instructing tracing agents
(Amended April 2014)
The Service has a new Trace and Framework Agreement that commenced on the 1st April 2014, All new instructions for individual tracing inspections and service of documents should be made on a rota basis and sent via email using the instruction form template to: -
Strategic Intelligence & Risk Services (Europe) Ltd Keith.stowell@sirseurope.co.uk
or
The Surveillance Group info@thesurveillancegroup.com
The appropriate forms and documentation required for instructing these agents are available on the Trace Agent intranet site here, including a table showing the rates charged by the different agents. Once an agent has been selected on a rota basis the instruction form should be completed and emailed to that agent using the above contact details.
The chosen agent should confirm receipt of the instruction within 24 hours, where this has not happened confirmation of receipt should be obtained. A note should be made on ISCIS (‘Notes’ tab, under the heading ‘Non surrender’) detailing the instruction provided to the agent. Invoices will be received and dealt with centrally.
For more information regarding non-cooperation, and the measures that can be taken to enforce co-operation, see Chapter 13.
In cases of non-surrender, the examiner may delay completing the CAR B so that an inspection can be carried out beforehand, dependant on local office practice, see Chapter 15, paragraph 15.46 for details. In all cases a CAR B must be completed by the 56 day deadline, and if a standard CAR B cannot be completed by this date, a CAR B non surrender [note 3] should be completed as an interim report. The CAR B non surrender may also be used as a substantive report combined with screen 85 being signed off.
[Back to Part 1 – Inspections generally] [On to Part 3 – Safety of staff on inspections]