February 2006
Following completion of the preliminary examination and the necessary enquiries to enable a decision to be made as to whether further investigation is necessary in the case, a Case Assessment Record (CAR) should be commenced, and a CAR A and CAR B should be completed. The CAR provides a complete record of the important events and decisions concerning a case, and consists of an ongoing set of documents, which will be added to during the course of the official receiver’s investigation (see also Part 5).
Guidance notes on the completion and storage of the CAR are available on the OROS intranet website under CAR Forms - Guidance Notes.
15.44 Forms to be completed in every case
The following forms should be completed in every case:
CAR A (report to creditors) [note 1]. For more detail of the information to be included in the CAR A see Chapter 18 - Reports to creditors.In debtor petition bankruptcy type 0 or type 1 cases a simplified CAR A form may be used (see paragraph 15.47)
CAR B [note 2]. The CAR B explains the reason for the insolvency and details any matters of further investigation (see also paragraphs15. 46 to 15.51.) In debtor petition bankruptcy type 0 or type 1 cases a simplified CAR B form may be used (see paragraph 15.47)
CAR D should also be completed in every company case, which provides a summary of the conduct of the directors of the company (see also paragraph 15.52.)
The primary document for each completed CAR form is the paper copy and this should be retained at the front of the case file in Part 1.
The CAR A and CAR B should be submitted as soon as sufficient information is available as a result of the initial enquiries, preliminary examination and further enquiries to enable a the official receiver to establish and test the cause of the insolvency and make a reasoned decision as to whether further investigation is appropriate in each case.
The expectations for the initial submission of the CAR A and CAR B are:
80% within 4 weeks (28 days) of the order
95% within 6 weeks (42 days) of the order
100% within 8 weeks (56 days) of the order
When the substantive CAR B is submitted, the LOIS screen 85 PID (preliminary investigation decision) should be signed off. If this is after 28 days, the reason that the CAR A and CAR B were submitted beyond 28 days should be recorded on the CAR B.
The completion of the CAR B should be delayed beyond 28 days where it is sensible to do so, e.g.;
If there are large amounts of accounting records to review,
Where the first interview has been delayed beyond 28 days, but contact has been made with the interviewee and the official receiver has good reason to believe that they will attend the rearranged interview,
If the official receiver is awaiting a response to an enquiry of a third party that will enable an informed decision to be made as to whether further investigation is necessary,
To enable the official receiver to carry out an inspection and further enquiries in order to establish the whereabouts of a director or bankrupt.
This list is not exhaustive, and each case must be judged on its own merits. The official receiver must balance the need to progress the case in as timely a manner as possible with the need to obtain sufficient information to enable an informed and robust decision to be made as to whether further investigation is warranted in the case.
Where the official receiver has been unable to make any contact with or establish the whereabouts of an interviewee, or where an interviewee has failed to attend upon the official receiver for interview, the CAR B (non surrender) [note 3] can be used either as an interim report on the case before the LOIS screen 85 PID is signed off and the substantive CAR B is submitted, or as the substantive CAR B in conjunction with signing off the LOIS screen 85 PID.
Each official receiver should determine his/her policy for the use of the CAR B (non surrender) form in his/her office. In the majority of cases where the director, partner or bankrupt has not been traced or has not surrendered, the CAR B (non surrender) form will be the appropriate form to use as the substantive CAR B before the 56 day deadline. However, there may be cases where it is more appropriate to use the standard CAR B form [note 4] and the most appropriate form should be used to fit the case.
If the CAR B (non surrender) is used as an interim reporting tool before the final CAR B, and the case subsequently remains as non trace or non surrender at 56 days then the interim and final paper version of the CAR B (non surrender) should both be kept on the case file.
The CAR B (non surrender) should contain details of appointments missed and the actions taken or recommended to trace the director, partner or bankrupt and enforce attendance. The official receiver should take all reasonable steps available to trace, contact and interview the director, partner or bankrupt before a substantive CAR B is completed. The actions taken may include;
County court judgment search,
Search of the electoral register,
Land Registry search,
Tracing inspection,
Application for a public examination,
Application for an enforcement order against a director under Rule 7.20,
Application for the suspension of a bankrupt’s discharge.
For more information on the enforcement of the duty to co-operate with the official receiver, see Chapter 13 - Co-operation, non co-operation and enforcement of the duty to co-operate.
The status of the CAR A (report to creditors) should also be detailed, and where the CAR B (non surrender) is being submitted as the substantive CAR B, it should be accompanied by the CAR A (report to creditors). Any other relevant information that has been obtained about the case should be detailed. In a bankruptcy case the form should also contain details of any previous bankruptcies within the six years preceding the bankruptcy order.
If a case remains non trace or non surrender when the CAR B is signed off, it should be place on Register A for non co-operation, unless the decision is taken at this time to abandon the case (see also paragraph 15.51.)
15.47 Abridged CAR A and CAR B form for debtors petition bankruptcy type 0 and 1 cases
(updated October 2013)
In type 0 and type 1 cases only, the official receiver has the option to use an abridged CAR A form [Note 5] and CAR B form [Note 6].
There are separate versions of the abridged CAR A forms, one for where there is no IPA and one for where an IPA has been agreed to. The abridged CAR A forms are suitable for use in cases where;
The abridged CAR B forms are for use in type 0 and type 1 cases where;
The abridged CAR A and CAR B forms will not be suitable for use in every type 0 and type 1 case, and the standard CAR A and CAR B forms should continue to be used in type 0 and type 1 cases where the use of the abridged forms is inappropriate. The official receiver's judgement should be applied within the guidelines issued as to whether the use of the abridged forms is appropriate on a case by case basis.
(August 2008)
There are two versions of this form, one for where the case is suitable for self sign-off by the examiner and one for where the case is not suitable for self sign-off by the examiner. Generally, a case is suitable for self sign-off where the examiner is fully qualified (i.e. not a trainee examiner) and the CAR is completed within the specified time limit after the making of the bankruptcy order. The specified time limit for examiner self sign-off is currently 42 days although this may be amended, reference should be made to the Official Receiver Services intranet site for further information.
Where the case is suitable for self sign off no comments need to be added to the CAR B form or on LOIS screen 81 (Preliminary Investigation Decision (PID) comments) as there should be sufficient information to justify and support the investigation and case administration decisions made on the case in the statement of affairs, initial contact form and telephone/court interview record form. Where the case is not suitable for self sign-off, the reasons for the insolvency and the steps taken to test the explanation given must be included in the CAR B.
15.48 Information required in the standard CAR B form
The main focus of the CAR B is to explain the reasons for the insolvency and to detail any matters for further investigation. It is submitted with the CAR A (report to creditors) which contains details of the assets and liabilities, as well as the trading history (where appropriate) and background to the reasons for the insolvency.
The reason for the insolvency should be recorded on the CAR B. A distinction must be made between the reason for the insolvency and any misconduct identified.
The director’s, partner's or bankrupt’s explanation for the insolvency must be detailed in the CAR B. A comment must then be made as to whether the explanation is reasonable, and if it is, why it is reasonable. In addition to asking the director, partner or bankrupt for his/her explanation for the insolvency, the official receiver should consider the explanation given against the circumstances of the case and all the other information available, such as accounting records, information from creditors etc. The official receiver may need to seek further information to enable a decision to be made as to whether the explanation given is reasonable. Any evidence that the official receiver gathers that supports or contradicts the reason for insolvency given by the director, partner or bankrupt should be detailed in the CAR B.
In cases where a deficiency account will assist in establishing or illustrating the reason for the insolvency, one should be completed on the form CAR B (def C) or CAR B (def B) [note 7] and submitted with the CAR A and CAR B.
Any matters of possible misconduct for further investigation should be detailed in the CAR B. In a compulsory liquidation where there is more than one director and further investigation is recommended, the CAR B should be clear about which director(s) each recommendation relates to.
Details should be given of:
The date of the alleged misconduct, the monetary loss as a result, the frequency of the action/transactions and who has suffered as a result of the director’s/partner's/bankrupt’s actions.
How the official receiver has become aware of the misconduct, e.g. disclosed at interview, reported by a third party or by examination of the accounting records.
The recommendation as to whether the matter should be investigated further and for what purpose, e.g submission of a statement of fact; disqualification report or application for a bankruptcy restrictions order.
Any relevant public interest criteria that have been considered for recommending whether the case is to be taken forward or whether the case should be abandoned.
Any cross reference to the CAR C [note 8] if this has been completed to assist in the CAR B decision in a complex case, although in the majority of cases this will not be completed until after the further investigation decision has been made.
The recommended action to be taken and the further information (if any) needed.
The comments and recommendations should be simple, clear and concise and based on identifiable facts. Any comments made should support the information/decision set out in the CAR B. Where appropriate, reference can be made to specific papers, e.g. narrative statement, letter from creditor, bank statements etc, and these should be attached to the CAR B if it is important that they are considered.
The CAR B should not include any defamatory or gratuitous personal observations or comments relating to the director, partner or bankrupt. It is essential that the CAR B does not contain any comments that could damage any ultimate prosecution case brought against a director, partner or the bankrupt.
The following decisions should be recorded on the CAR B;
In addition, in a bankruptcy case, the following decisions are also recorded;
A robust decision should be made as to whether further investigation is appropriate in each case. Further investigation should not be undertaken merely as an interesting exercise, but should be focussed on identifiable matters of misconduct of a sufficiently serious nature to warrant action being taken. If information is supplied to or uncovered by the official receiver at a later date that identifies potential misconduct sufficiently serious in nature, then the investigation decision can be reviewed. This is provided that the possible offence or misconduct is not stale, and in a bankruptcy, that the bankrupt has not obtained his/her discharge.
The Company Directors Disqualification Act 1986 section 7(3) requires office holders for insolvent companies, including official receivers, to report to the Secretary of State where they identify unfit conduct.
The Insolvent Companies (Reports on Conduct of Directors) Rules 1996 require insolvency practitioner office holders to make a report or return to the Secretary of State within six months of their appointment. The reporting rules do not refer to official receivers in a winding-up by the court but official receivers are required to make an internal record of their decision on each director in a CAR D.
The CAR D should be completed within six months of the order listing any matters of misconduct.
It is important to remember that the disqualification decision is not made about the case but for each individual director. A "D1" or "D3" decision should be recorded for every director or shadow director of the company who was a director or shadow director at any time during the three years preceding the relevant insolvency order, and not just for directors or shadow directors in office at the time the insolvency order was made. Full consideration of the facts should be given and the decision and the reasons for that decision should be clearly recorded.
A "D3" decision is recorded where the official receiver holds no evidence of misconduct.
A "D1" (no report) records that there is known evidence of material unfit conduct which for reasons of the director's or shadow director's personal circumstances and/or the nature of the unfit conduct would not justify a substantive report. A "D1" (no report) should not be completed solely because the official receiver suspects misconduct has occurred.
A "D1" with full report decision should also be recorded ensuring that the reasons for the decision are adequately recorded in the CAR B.
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