General enquiries may be directed to IPU.Email@insolvency.gov.uk   

29. Update on research projects commissioned by The Insolvency Service.

As part of our commitment to evaluate the provisions of the Enterprise Act 2002, The Insolvency Service has commissioned several research projects. On the Corporate side, these are: 

(1)   ‘Report on Insolvency Outcomes’ by Dr Sandra Frisby from the University of Nottingham. This report is based on the findings of research conducted between November 2004 and May 2006 and consisted of the construction of a database of 2063 companies, which entered into administration or administrative receivership between September 2001 and September 2004. Additionally a series of interviews with insolvency practitionerss and bankers was carried out in order to amplify and explain the trends recorded in the database. 

(2)   ‘Study of Administration Cases’ by Alan Katz and Michael Mumford, Research Fellows at the International Centre for Research in Accounting at Lancaster University. This paper considers changes in the use of administration relative to other corporate insolvency procedures and focuses on whether there may have been some substitution of administration for liquidation. The study also assesses the extent to which cases that went into administration during 2004 could be shown to meet the statutory purpose of administration. 

(3)   ‘The Impact of the Enterprise Act 2002 on Realisations and Costs in Corporate Rescue Proceedings’ by John Armour, Audrey Hsu and Adrian Walters, Research Fellows at the Centre for Business Research, Cambridge University, Department of Accounting, National Taiwan University and Nottingham Trent University respectively. In particular, this study compares the operation of the new streamlined administration procedure to that of administrative receivership. 

Full copies of their reports can be found on our website, along with other research papers and can be accessed here. 

The Insolvency Service has hosted seminars for the authors to present their findings, which have resulted in informative discussion amongst those present. We are sure you will find these papers of equal interest. 

The Insolvency Service is committed to developing evidence-based policy and to support this, it undertakes research and evaluation to: 

• Ensure the delivery of outcomes that both fit within Departmental objectives and Governmental policies, and meet the requirements of ‘the market’; and
• Utilise its unique position of having responsibility for both policy development and operational delivery for the benefit, and with the involvement, of its stakeholders.

Details of evaluation work undertaken by The Insolvency Service can also be found on our website and can be accessed here. 

Final evaluation reports of the Enterprise Act 2002 will be published later this year. 

General enquiries may be directed to Policy.unit@insolvency.gov.uk;

Telephone: 0207 291 6740

30. UNCITRAL CLOUT Correspondent 

The means for collecting and disseminating court judgments and arbitral awards that relate to legal texts emanating from the work of the UNCITRAL (United Nations Commission on International Trade Law) Commission is known as ‘Case Law on UNCITRAL Texts’ (CLOUT).  

The collection of court judgements and arbitral awards and the preparation of abstracts thereon is done by National Correspondents designated by States who are party to an UNCITRAL Convention, or States that have enacted legislation based on an UNCITAL Model Law. 

As the UNCITRAL Model Law on Cross-Border Insolvency has been enacted within Great Britain (The Cross-Border Insolvency Regulations 2006 (SI 2006/1030) came into force on 4th April 2006), we have deemed it appropriate to appoint a National Correspondent in respect of cross border insolvency matters. 

Professor Ian F. Fletcher, Professor of International Commercial Law, University College London and a Barrister at 3-4 South Square, Gray’s Inn, London has kindly accepted our invitation to take on this role. 

The primary task of the National Correspondent is to collect judgments issued by the courts in Great Britain and to prepare abstracts and forward them to the Secretariat of the UNCITRAL Commission. The abstracts submitted are then translated and published in all six UN Languages, and available on the CLOUT website at:

http://www.uncitral.org/uncitral/en/case_law.html 

To assist Professor Fletcher, in his role as the designated reporter for Great Britain, it is important that he becomes aware of any cases where the Model Law is used (including possibly some which do not reach court, e.g. because a party from whom information is required realises that the Model Law makes it inevitable that they will have to comply in the end).  

To this end, if you or any of your colleagues were involved in a Model Law application, it would be very much appreciated if you could supply the following information to Professor Fletcher: 

1)     Full name of the case and any identifying reference numbers, such as court listing number;

2)     Neutral citation where allocated;

3)     Names of the court and of the judge;

4)     Date(s) of hearing and decision;

5)     If possible, some information about the subject matter of the application, details of the articles of the Model Law that are invoked for the purposes of the application/decision – and (where available) any transcript of the case;

6)     If the case is reported in a citable series of reports, those details should be included. 

In addition, it would be helpful if the names of the parties’ legal representatives were also provided. 

Could you please send details to Professor I.F. Fletcher, Faculty of Laws, University College London, Bentham House, Endsleigh Gardens, London WC1H 0EG. If using electronic communication, the following address should be used: i.f.fletcher@ucl.ac.uk

Any enquiries regarding this article should be directed towards Muhunthan Vaithianathar, Policy Unit, Area 5.7, 21 Bloomsbury Street, London, WC1B 3QW; telephone: 020 7637 6515, email: muhunthan.vaithianathar@insolvency.gov.uk

General enquiries may be addressed to Policy.unit@insolvency.gov.uk; Telephone: 0207 291 6740

31. Proposals for the reform of the debtor petition process 

In 2006, over 80% of bankruptcy orders made in England and Wales were from debtors petitioning for their own bankruptcy.  The increase in the number of bankruptcy orders made in the last four to five years, particularly debtors own petitions, has undoubtedly contributed to the strain on HM Court Services’ resources. 

In some parts of England and Wales debtors face a wait of up to four months from initial contact with the courts to obtaining debt relief via a bankruptcy order. Other court users also face lengthy delays as court staff deal with non-contentious debtor petitions.  If one considers that the role of the court is to resolve disputes, it can be argued that as there is no dispute in a debtor’s petition case, there is no need for the debtor to go through the court system in this first instance. 

Proposal 

The Insolvency Service is therefore proposing to remove the requirement that the debtor must file a petition for bankruptcy at court.  Instead, the Official Receiver could make the bankruptcy order administratively, thus freeing up the court’s time to deal with creditor’s petitions, public examinations, bankruptcy restriction orders, income payment orders, and other contentious matters and civil processes. 

Consultation

Since 22 October 2007 we have been inviting all interested parties to take part in the consultation on the above proposals.  The consultation document, entitled ‘Bankruptcy:  proposals for reform of the debtor petition process’ can be accessed at The Insolvency Service website in the live consultation register, or at the following address: 

http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/con_doc_register/registerindex.htm 

The consultation closes on 11 January 2008. 

Any enquiries regarding the consultation or requests for hard copies of the proposal document should be directed to Maria Isanzu, Policy Unit, Area 5.7, 21 Bloomsbury Street, London WC1B 3QW; telephone: 020 7291 6733 email: maria.isanzu@insolvency.gov.uk.   

General enquiries may be directed to Policy.unit@insolvency.gov.uk,

Telephone: 0207 291 6740.

32. Enterprise Act 2002 – Corporate Insolvency Provisions: Evaluation Report and discussion/forum on the future development of corporate insolvency                          

The Insolvency Service has completed an evaluation of the corporate insolvency provisions of the Enterprise Act 2002, which came into force on the 15 September 2003.  

The evaluation was undertaken to comprehensively assess whether, to what extent and how the provisions of the Enterprise Act 2002 met its policy objectives and to capture the real effects of the legislative action.  The evaluation includes both quantitative and qualitative data collected from various sources over a four-year period. 

The evidence from the evaluation indicates that the Enterprise Act 2002 is having some success in achieving its objectives. 

In summary, The Enterprise Act: 

• Has promoted the use of administration relative to administrative receivership and made administration a more viable procedure for small and medium-sized enterprises.

• Has encouraged the use of non-court order entry routes into administration.

• Has shortened the average duration of administrations.

• Has provided for alternative exit routes from administration.

• Has reduced some of the direct costs (primarily insolvency practitioner and legal fees) of administration.

• Has increased returns to secured and preferential creditors. 

As a result of the evaluation, there are four main recommendations for the future: 

(a)    A review of Creditors Voluntary Liquidation

(b)   Continued monitoring of the impact of the Enterprise Act and further evaluation, in particular looking at the impact of the ‘prescribed part’

(c)    Continued use of insolvency academics, other specialists and stakeholders in evaluation activities

(d)   Continued observance of the impact of case law and other legislation on the Enterprise Act and statutory amendments to be made as required 

A full copy of the evaluation report can be found on our website and can be accessed at the following address: 

EA02CorporateInsolvencyReport.doc

The Insolvency Service also hosted a seminar on the 12 February 2008 to present the key findings of the evaluation report and to discuss widely and openly how corporate insolvency may develop in the future. To inform this discussion, a panel of experts was asked to give their personal views on the future development of corporate insolvency. 

Professor David Burdette of Nottingham Trent University gave an academic view. Jennifer Marshall, a partner in the Global Restructuring Group at Allen and Overy gave a legal practitioners view and Steven Law, a partner at Ensors gave an insolvency practitioners view. This was then followed by a question and answer session. 

Slides and notes from the seminar can also be found on our website and can be accessed at the following address: 

CorporateInsolvSeminar.htm  

Any enquiries regarding the above should be directed towards Muhunthan Vaithianathar, Policy Unit, Area 5.7, 21 Bloomsbury Street, London, WC1B 3QW; telephone: 020 7637 6515 email: muhunthan.vaithianathar@insolvency.gov.uk

General enquiries may be directed to Policy.Unit@insolvency.gov.uk

Telephone: 0207 291 6740

33. Floating charges and application of the prescribed part 

The case of Thorniley v Revenue and Customs Commissioners (Ch D (Companies Ct)) (also known as Airbase (UK) Limited, Re (Ch D (Companies Ct))) has clarified the position regarding the “prescribed part” of the company’s assets set out in section 176A of the Insolvency Act 1986, from which unsecured creditors must be paid in priority to floating charge holders. The court has confirmed that the remaining, effectively unsecured amounts due to the floating charge holder(s) do not constitute “unsecured debts” for the purpose of section 176A(2), and cannot partake of the prescribed part. Any shortfall relating to a floating charge over the company’s assets should be excluded from distributions from the prescribed part. 

In arriving at this conclusion the court considered the construction and wording of section 176A, particularly subsection 176A(2)(b). This provides that the liquidator, administrator or receiver “shall not distribute [the prescribed part] to the proprietor of a floating charge except in so far as it exceeds the amount required for the satisfaction of unsecured debts”.  

Any enquiries regarding this article should be directed towards Andrew Shore, IP Policy Section, Area 5.7, 21 Bloomsbury Street, London, WC1B 3QW; telephone: 020 7291 6769; email: andrew.shore@insolvency.gov.uk 

General enquiries may be directed to IPPolicy.Section@insolvency.gov.uk; Telephone: 020 7291 6772

34. Enterprise Act 2002 – Individual Insolvency Provisions: Evaluation Report

The Insolvency Service has completed an evaluation of the individual insolvency provisions of the Enterprise Act 2002, the majority of which came into force on 1 April 2004.   

The evaluation was undertaken to comprehensively assess whether, to what extent and how the provisions of the Enterprise Act 2002 met its policy objectives and to capture the real effects of the legislative action. The evaluation includes both quantitative and qualitative data collected from various sources over a four-year period. 

The evidence from the evaluation indicates that the individual insolvency provisions of the Act have achieved their intermediate policy objectives in most areas – of the 18 intermediate policy objectives, 15 have been fully or partially achieved. Where intermediate policy objectives have been only partially achieved, this is mainly due to third-party actions over which The Insolvency Service has no control.

As regards the ultimate objectives of the individual insolvency provisions of the Act:

• The alleviation of the social consequences of bankruptcy has been partially achieved - bankrupts are freed from bankruptcy restrictions quicker and they are subject to fewer restrictions. However, a bankrupt’s access to the financial market has not improved due to lack of change in lenders’ policies, and the stigma attached to bankruptcy remains the same; and
• As regards the encouragement of business start-ups, the insolvency provisions of the Enterprise Act 2002 only play a small part in affecting this headline outcome. The insolvency provisions of the Act have not yet affected the ‘fear of failure’ and a bankrupt’s ability to recommence trading is still hindered by a bankrupt’s restricted access to the financial market and business’s attitudes to bankrupts.

 The main recommendations as a result of the evaluation are that The Insolvency Service:

• Undertakes a detailed cost-benefit analysis of early discharge, as soon as possible, to assess whether the resources required to administer the early discharge process and the burdens placed on businesses, the courts and the Official Receiver are justified by the limited benefits afforded by early discharge, with a view to repealing the provisions;
• Subject to the results of the above, undertakes a review of the early discharge process to ascertain whether delays in the process can be eliminated;
• Increases its publicity of the Bankruptcy Restrictions Order (BRO) regime and reporting on cases where BROs are obtained, in order to enhance the knowledge and impact of the BRO regime;
• Undertakes a detailed cost-benefit analysis of whether, taking into account any amendment to supervisor fees, the resources required to deal with more complex cases and for a centralised Fast Track Voluntary Arrangement (FTVA) administration centre are justified by any benefits afforded by FTVAs over those offered by non-FTVA post-bankruptcy IVAs; and
• Considers the possibility of an automatic annulment of a bankruptcy order following approval of a post-bankruptcy IVA (after expiry of 28 days to allow for any objections).

A full copy of the evaluation report can be found on our website and can be accessed by the following link: 

report.pdf  

Any enquiries regarding the above should be directed towards Caroline Burton, Policy Unit, Area 5.7, 21 Bloomsbury Street, London, WC1B 3QW; telephone: 020 7637 6517 email: caroline.burton@insolvency.gov.uk 

General enquiries may be directed to email policy.unit@insolvency.gov.uk

Telephone 020 7291 6740

35. Change to JIEB syllabus and examination process 

The syllabus for the 2008 Joint Insolvency Examination has been brought into line with current examination practice by restating the syllabus from the format of a list of topics into a series of objectives or learning outcomes which a successful candidate should be able to achieve. The intention has been to prepare a syllabus that is generic to the three papers (Personal Insolvency; Liquidations; and Administrations, Company Voluntary Arrangements and Receiverships) and to two jurisdictions (England and Wales, and Scotland). This avoids much of the duplication and very detailed lists of procedures that were a feature of the syllabus format of prior years. 

The learning outcome syllabus is also intended to set out clearly the distinctions between non-formal practice of an analysis and advice nature and formal practice of appointments as office holder. 

However, this reformatting of the syllabus is not intended to introduce any substantive change from the 2007 syllabus in the subjects that may be examinable (other than routine updating for legislation in force at 30 April 2008). 

The subjects of the three papers remain Liquidations; Administrations, Company Voluntary Arrangements and Receiverships; and Personal Insolvency. Candidates who have not yet passed any of the papers may now elect to sit only one paper, should they wish. Those who have passed at least one of the three papers must pass the remaining paper(s) in a single session. 

An additional 30 minutes has been allowed in each exam for candidates to read and check their work. The standard examination time is therefore now three hours and thirty minutes (3:30). 

Examinations will take place in November each year (rather than December, as was previously the case), and will typically fall on the first Monday, Tuesday and Wednesday of the month. This year the examinations fall on 3, 4 and 5 November. 

A copy of the 2008 syllabus and Notes for Candidates can be found at: 

JIEB2008SyllabusNotes%20.doc 

Any enquiries regarding the syllabus change (only) should be directed towards Elizabeth Blount, Secretary to the Joint Insolvency Examination Board, C/o The Institute of Chartered Accountants in England & Wales, Learning & Professional Development,  Metropolitan House, 321 Avebury Boulevard, Milton Keynes, MK9 2FZ; telephone: +44 (0) 1908 248 309; email: elizabeth.blount@icaew.com. Enquiries regarding examination entry and registration should be addressed to the appropriate Recognised Professional Body, and NOT to the above contact. 

General enquiries may be directed to IPPolicy.Section@insolvency.gov.uk; Telephone: 020 7291 6772

36. Launch of Investigations and Enforcement Services (IES) 

A new business has been created within the Insolvency Service which comes into being on 1 January 2009.  Investigations and Enforcement Services (IES) brings together the current businesses of Investigations, Enforcement and Companies Investigation Branch to form a national investigation and enforcement structure which will be headed by Robert Burns, currently Inspector of Companies. 

The IES vision going forward encapsulates the delivery of an efficient and flexible investigation and enforcement capability by professional, trained and motivated teams – targeting outcomes that reflect the public interest, promoting fair markets and engaging with our stakeholders in order to maximise our impact.   

The creation of IES represents the implementation of one of a number of recommendations made by Grant Thornton, who were contracted to conduct a review of the Insolvency Service’s investigation and enforcement activity. 

Grant Thornton’s report, which was published on 4 July 2008, was positive about the quality of investigation and enforcement operations across the Insolvency Service, referring to “an experienced and committed workforce, that effectively discharge their remit.”  One of the principal recommendations was that the Service should organise investigation and enforcement activities so that they could be conducted in the most unified, effective and efficient way possible.  The creation of IES will achieve this. 

Priorities for the new business include: 

• the establishment of an investigation career stream, linked to a professional qualification, that will enhance opportunities for movement and advancement both within the investigation specialism and across the wider Insolvency Service and will enhance the flexibility of IES staff to focus on particular areas of concern as required;

• maximising the quality and efficiency of investigation and enforcement processes by identifying and promoting best practice and taking a corporate approach to the pursuit of excellence; and

• engaging with stakeholders with the aim of maximising the impact of investigation and enforcement activities. 

“This is an exciting time for the Service”, according to Stephen Speed, Inspector General and Agency Chief Executive, who states “the establishment of IES marks a major step forward.  The new business, which will work seamlessly with Official Receivers Services, makes the most of the Service’s skills and talents for investigation and enforcement work in delivering for our customers. Our vision going forward is of a vibrant, outward looking and ambitious organisation that engages with and is responsive to the concerns of our stakeholders.” 

Any enquiries regarding the above should be directed towards Gay Burns or Clare Quirk, Investigations and Enforcement Services; telephone: 020 7596 6130/0151 625 2153 email: gay.burns@BIS.gsi.gov.uk or, clare.quirk@insolvency.gov.uk

37. JIEB Examiner and moderator vacancies 

The Joint Insolvency Examination Board (JIEB) exams consist of a set of practical and technical examinations which all licensed insolvency practitioners are required to pass.  Examiners and moderators responsible for setting, marking and moderating the examinations are drawn from the insolvency profession. 

The fees paid to examiners and moderators provide a useful additional income but are not sufficient to cover the time spent on a normal professional charge basis.  However, appointment to an examining team has important additional benefits for the individual and firm. 

JIEB is constantly in need of new team members and if you or anyone in your firm wish to consider applying for such a role, you are encouraged to contact JIEB for further information as soon as possible. 

Any enquiries regarding this article and for further information about the roles should be directed towards Pauline Cozens, JIEB, 321 Avebury Boulevard, Milton Keynes MK9 2FZ.  Telephone: 01908 248 204,  email: Pauline.Cozens@icaew.com

38. Publication of Annual Review of Insolvency Practitioner Regulation and Report on the operation of SIP 16

The Insolvency Service has published the first annual review of insolvency practitioner regulation, which is now available on our website.  The review sets out the essential features of the regulatory regime that governs insolvency practitioners; what the public and businesses can expect from it, and what The Insolvency Service and the other regulators are doing to improve it.

In addition, a report on the first six months operation of SIP 16, which is concerned with the disclosure of information in pre-pack administrations, has also been published.  This sets out the key findings of our monitoring of information provided by insolvency practitioners pursuant to SIP 16 and indentifies those areas where compliance with the SIP may be improved.  It is anticipated that a further report will be published in early 2010.

The Annual Review of Insolvency Practitioner Regulation is available here:

http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/iparea/INS_Practitioners.pdf

The Report on the first six months operation of SIP 16 is available here:

http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/policychange/sip16-final.pdf

Enquiries regarding this article should be directed towards IP Policy Section, Area 3.6, 21 Bloomsbury Street, London, WC1B 3QW; telephone: 020 7291 6772; email: IPPolicy.Section@insolvency.gov.uk

39. Securing chip and PIN devices in insolvency proceedings

The UK Cards Association (the trade association representing all the major credit, debit and charge card issuers) plays a leading role in preventing card fraud and is keen to work closely with insolvency practitioners. Having been previously responsible for the introduction of chip and PIN, The UK Cards Association is keen to help ensure that chip and PIN devices are securely managed during each stage of the insolvency process. SOCA (Serious Organised Crime Agency) is also supporting The UK Cards Association in this endeavour.

Since its introduction back in 2003, chip and PIN has had a major impact on tackling card fraud in the UK. However as fraudsters have found it increasingly difficult to commit particular types of fraud, they have started to explore other avenues for obtaining cardholder data, one of which is through chip and PIN devices that are used in retail shops and stores for accepting card payments.

In recent years the banking and retail industries have seen a number of cases where criminal gangs have targeted chip and PIN devices. These gangs tamper with the internal circuitry of the chip and PIN device and then seek to reintroduce them into retail sites. This allows the fraudster to capture card (magnetic stripe) and PIN data which is subsequently used to create magnetic stripe clones of genuine cards for fraudulent use overseas in countries that have not yet deployed chip and PIN. This activity is clearly of considerable concern to us all.

It is known that fraudsters will go to considerable lengths to obtain chip and PIN devices. Examples that have been seen range from committing theft at retail sites to the purchasing of these devices from internet merchants such as eBay. Due to the recent economic difficulties, a large number of household retail names have entered insolvency proceedings.  The potential availability of large numbers of redundant devices when such retailers go out of business is of considerable concern to the banking industry. Therefore it is important that these devices are dealt with in a safe and secure way when a business is closed.

There is a particular risk that these devices might be stolen by unscrupulous retail or landlord nominated staff at the early stages of an insolvency process. Therefore extra care is needed in handling these devices from the very early stages of a process. There is also a potential reputational risk to insolvency practitioners if these devices are not handled safely and securely and end up in the hands of the wrong people.

The UK Cards Association has provided some information on the Card Watch website for insolvency practitioners under the retail section FAQ’s. In order to access the website and the information, please follow the link below:

http://www.cardwatch.org.uk/faqs.asp?sectionid=1&fgid=41&Title=insolvency_practitioners_chip_and_PIN.

Any enquiries regarding this article should be directed towards: cardwatch@apacs.org.uk

40. Launch of a guide for debtors’ advisors – “In Debt? Dealing with Creditors”

The Insolvency Service has launched a new guide to debtors and debt advisors, entitled ‘In Debt?  Dealing with your creditors.’  The guide contains an overview of the main debt solutions, not just those administered by The Insolvency Service, and addresses what we believe to be a gap in the literature currently available to debtors from all sources. 

The guide includes the following:

• A summary of the key features of the main statutory and non-statutory debt solutions;

• An overview on how each one works;

• The pros and cons of each solution;

• Where to obtain further help and information.

The guide has been produced in conjunction with the IVA Standing Committee, which includes representatives from many sectors of the insolvency world, including R3, IPA, ICAEW and IPC, as well as debt advice organisations, creditor bodies and insolvency practitioners. The Insolvency Service has also consulted with other organisations, including Government, regulatory and charitable organisations, and we are grateful to them all for their valuable input.

The Guide is available electronically to all advice agencies, and insolvency practitioners. It is also on The Insolvency Service website from where it can be accessed and downloaded.  The Guide is badged with The Insolvency Service logo and signposts Government funded advisers for debt advice.

The Guide is also available in word format. To request a copy of the word version, together with our standard terms and conditions for its use, please contact Policy.unit@insolvency.gov.uk .

Hard copies of the Guide are available on request, and it is available online at:

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/indebt-web.pdf

Any enquiries regarding the above should be directed towards Karol Sanderson, Policy Unit, 3rd Floor, 21 Bloomsbury Street, London WC1B 3QW; e-mail: Lynda.Copson@insolvency.gov.uk

General enquiries may be directed to Policy.unit@insolvency.gov.uk; Telephone: 020 7291 6740

41. Project for Modernisation of the Insolvency Rules - Update

Following the introduction of the new modernised insolvency advertising regime on 6 April 2009, The Insolvency Service is proceeding with the preparation and delivery of the remaining modernisation changes identified for the Insolvency Rules which are planned to come into force on 6 April 2010. Thereafter, all amendments to the Insolvency Rules will be taken into a new set of Rules which are planned to come into force on 6 April 2011.

The further modernisation proposals planned for April 2010 are subject to the successful passage of a Legislative Reform Order (LRO) that is currently going through the Parliamentary process. This will make necessary changes to the Insolvency Act to allow the Rules to provide for matters such as e-delivery of insolvency notices and the use of websites for sending reports and other documents to creditors.

We have recently sent a draft of the modernisation changes proposed for April 2010 to the Insolvency Rules Committee, who are required to be consulted on amendments to the Rules before they are laid before Parliament. The expectation is that they will have completed that consideration and signed off the amendments by the end of November 2009 to enable the Rules to be made early in the New Year, a few months  before they are planned to come into force on 6 April 2010.

Policy officials are keen to help the insolvency profession and other stakeholders prepare for what will be a substantial raft of changes coming into force in April 2010. With this in mind, The Insolvency Service is preparing a version of the current Insolvency Rules as if they had been amended by the proposed amendments planned for April 2010. This is expected to be published on The Insolvency Service’s website by early September 2009 and  will contain tracked changes highlighting the amendments. To the extent that it has been possible, this document will reflect those suggestions that stakeholders have made to our earlier consultations. Given the timeframe for delivery of the Rules amendments, the version that will be published should not be seen as a further consultation but as an aid to planning for the modernisation changes.

To provide further assistance to stakeholders, The Insolvency Service is planning to hold a stakeholder conference at 21 Bloomsbury Street, London during the afternoon of Wednesday 14 October 2009 to discuss and explain the nature of the principle modernisation changes proposed for April 2010. Invitations will be sent out over the next month and numbers will be restricted. However, should any practitioners or interested persons wish to be added to the invitation list please feel free to contact us at the address below.

Any enquiries regarding the above should be directed towards Neil Ogilvie, Policy Unit, Zone B, 3^rd Floor, 21 Bloomsbury Street, London WC1B 3QW; e-mail Neil.Ogilvie@insolvency.gov.uk

42. Consultation on Debt Management Schemes

On 18 September the Consultation Paper “Debt Management Schemes - delivering effective and balanced solutions for debtors and creditors” was issued. This is a joint consultation between the Ministry of Justice, the Department for Business Innovation & Skills (BIS) and The Insolvency Service.  The consultation is aimed at all those with an interest in providing options to help the over-indebted, debtors with multiple debts in England and Wales and their creditors.

In considering whether action is required, the Consultation Paper is guided by the following objectives:

• helping people who could, but are struggling to, repay their debts;
• ensuring that fees charged by debt management scheme operators are reasonable and consistent;
• ending the practice of some creditors adding interest to debts included in a repayment plan;
• preserving the best features of the current debt management industry;
• ensuring that needs of debtors, creditors and operators are correctly balanced; and
• ensuring that debtors are aware of the range of options available to them and are advised on the most appropriate and sustainable solution(s) for their circumstances.

The options considered in the Consultation Paper are:

1. continuing with measures underway to raise awareness about current schemes and enforce existing rules with operators;

2. improving current schemes by the introduction of best practice codes or other non-statutory regulation; or

3. commencing the powers in Chapter 4 of Part 5 of the Tribunals Courts and Enforcement Act 2007 to introduce statutory debt repayment plans.

The consultation and accompanying initial Impact Assessment pose a number of questions, the responses to which will assist in determining future policy in this area.

The consultation period ends on 18 December 2009 and the full Consultation Paper, initial Impact Assessment and details of how to respond can be accessed on.http://www.justice.gov.uk/consultations/debt-management-schemes.htm

Any enquiries regarding this article should be directed towards Andy Woodhead, telephone: 0207 291 6738. Email: Andy.Woodhead@insolvency.gov.uk

General enquiries may be directed to Policy.unit@insolvency.gov.uk; Telephone: 020 7291 6740

43. Statistics on insolvent individuals by geographical location

For the first time in July 2009, the Insolvency Service published on its website the number of bankruptcy orders and individual voluntary arrangements by region and local authority. The information is available on an annual basis covering the period 2000 to 2008 and will continue to be updated annually.

The publication of this information is only made possible by the continued high quality of address information provided by bankrupts and insolvency practitioners in their returns to the Insolvency Service.

The figures can be seen via the link here: http://www.insolvency.gov.uk/otherinformation/statistics/regionalstatisticsmenu.htm  

Any enquiries regarding this article should be directed towards Gary Mills, Policy Unit, Zone B, 3rd Floor, 21 Bloomsbury Street, London WC1B 3QW. Email: gary.mills@insolvency.gov.uk

General enquiries may be directed to email policy.unit@insolvency.gov.uk   

 44. Publication of Insolvency Guidance Paper – ‘Dealing with complaints’ 

The above Insolvency Guidance Paper (“IGP”) has recently been published and offers guidance to insolvency practitioners as to matters which they may consider when dealing with complaints. 

The IGP is available on The Insolvency Service website at the link below: 

IGP%20Complaints%20with%20header_final%20011009.doc  

General enquiries may be directed towards IP Policy Section, 3^rd Floor Zone B, 21 Bloomsbury Street, London, WC1B 3QW; telephone: 020 7291 6772; email: IPPolicy.Section@insolvency.gov.uk

Responses to The Insolvency Service’s 2007 consultation on reforming the debtor bankruptcy petition process revealed clear support for the idea of bankruptcy orders being made administratively. On 13 November 2009 we launched a further consultation setting out detailed proposals for a new route into bankruptcy, based on debtors making an application directly to an official, either electronically or through the post.

Stephen Speed, Chief Executive of The Insolvency Service, said:

Already over 94% of those petitioning for their own bankruptcy seek advice prior to accessing bankruptcy. We want to build on this and propose using prompts and pop up messages in the on-line application process to encourage debtors to seek advice as early as possible.

We also want to ensure that bankruptcy remains a serious regime. Bankruptcy is more than just an appearance at court, and we are not proposing any changes to the process after the order is made. We will provide the information to make sure that applicants are fully aware of the consequences of bankruptcy before they proceed.

The consultation also considers the removal of the early discharge provision, which enables some bankrupts to be discharged from bankruptcy in less than one year. With the cost of administering early discharge proving greater than the benefits to the debtor, to creditors or to The Insolvency Service, the removal of this discretionary provision would in our view be beneficial.

The consultation document is available to view on our website at www.insolvency.gov.uk. Tell us what you think at policy.unit@insolvency.gov.uk by 8^th February 2010.

Any enquiries regarding this article should be directed towards
Maria Isanzu, 21 Bloomsbury Street, London WC1B 3QW. Telephone: 020 7291 6733 email: maria.isanzu@insolvency.gov.uk

General enquiries may be directed to policy.unit@insolvency.gov.uk.

The Office of Fair Trading (‘OFT’) has implemented a gateway for requesting searches of the Consumer Direct database in all insolvency cases.  Previously, insolvency practitioners have been able to make requests for searches directly, but OFT became aware that some of the requests they received were not from authorised insolvency practitioners. OFT have therefore decided to involve The Insolvency Service as the gateway to ensure that only valid requests are made. 

An insolvency practitioner is able to request a search of the Consumer Direct database when they are acting as trustee or liquidator and making enquiries into the affairs of an insolvent business.  The database holds details of any complaints made against or enquiries into trading businesses. The OFT will now supply specific information about a particular complaint.

To obtain information insolvency practitioners acting as either liquidator or trustee will have to complete a form entitled ‘Request Form for Consumer Direct Information Only’. The Form and the Guidance Notes for use are available on The Insolvency Service website at the following link:

Request%20form%20and%20Guidance_V1%201.doc%202003%20Version%20IP's.doc

The Form contains a box entitled ‘Enactment(s) under which functions or duties are being pursued’. This should be completed by the insolvency practitioner detailing the relevant section of either Companies Act 2006 or the Insolvency Act 1986 that enables them to make enquiries. There is provision on the Form for stating the name of the company for which information is requested and whether the complainant’s details are required.

The Form should be completed electronically and be sent to the Official Receiver Operations ‘Appointed Contact’. The form will then be forwarded to the OFT who manage the Consumer Direct database. Details of the appointed contact are provided below.

When the OFT undertakes to provide the information, it will endeavour to do so within 20 days of receiving the request.

Any enquiries regarding this article should be directed towards
Stephen Parkinson, Service Delivery Manager, OR Business Support, Cannon House, 18 Priory Queensway, Birmingham B4 6FD. Telephone: 0121 698 4313 email: stephen.parkinson@insolvency.gov.uk

General enquiries may be directed to ORBS@insolvency.gov.uk

47.  Publication of consultation on pre-pack sales in administration 

The Insolvency Service has published a consultation document and called for evidence on improving the transparency of, and confidence in, pre-pack sales in administration. The publication of the consultation follows widespread concerns that have been expressed about the pre-pack process and seeks views on a number of possible options for change. 

The consultation document is available to view on our website at the following link: 

registerindex.htm 

48. Insolvency Statistics: New Personal Insolvency Statistics & User Engagement Consultation 

Official Statistics showing personal insolvency rates by region and updated individual voluntary arrangement (IVA) completion and failure rates, including those for 2009, have been published. 

Regional figures for bankruptcies, IVAs and Debt Relief Orders (since 6 April 2009) for 2000 to 2009 are available on the statistics section of The Insolvency Service website, which can be found at the link below: 

http://www.insolvency.gov.uk/statistics 

These figures include the rates per 10,000 of the adult population, as well as a break down for each procedure to local authority level. 

Updated statistics showing the proportions of IVAs registered in each year since 1987 that have completed, failed or are ongoing have also been published on The Insolvency Service website. These statistics update those first published in December 2009 and show the status of IVAs as of May 2010. 

The Insolvency Service Statistics team has launched a user engagement consultation, to run from 26 July to 18 October 2010. We are interested in hearing your views about how you use our statistics and how you think we could improve them. Further information regarding this consultation can also be found on the statistics section of The Insolvency Service website. 

Any enquiries regarding these official statistics should be directed towards
Rebekah Paul,3^rd Floor – Zone B, The Insolvency Service, 21 Bloomsbury St, London WC1B 3QW.  Telephone: 020 7637 6314, email: rebekah.paul@insolvency.gov.uk 

General enquiries may be directed to:  insolvency.enquiryline@insolvency.gov.uk  Telephone 0845 602 9848.

49. Publication of OFT report ‘The Market for Insolvency Practitioners in Corporate Insolvencies’ 

The Office of Fair Trading (OFT) published the above report on 24 June 2010 which is available on their website at the link below: 

http://www.oft.gov.uk/shared_oft/reports/Insolvency/oft1245 

The report will now be considered by The Insolvency Service and others in order to inform the Government’s response.  Previous practice has been to publish a response to OFT reports containing recommendations to Government within 90 days.  In considering the report BIS and The Insolvency Service will work closely with other relevant Government departments, the Recognised Professional Bodies and other parties with an interest in insolvency. If any recommendations are subsequently taken forward there is also likely to be a further period of consultation.   

General enquiries may be directed to IPPolicy.Section@insolvency.gov.uk   Telephone: 020 7291 6772

50. Debtor petition reform and Official Receiver automatically becoming trustee: Publication of consultation responses 

Debtor Petition Reform and Early Discharge 

The summary of responses to the consultation on debtor petition reform and early discharge is now available to view on our website.  In a written statement to Parliament made in October 2010, Minister Edward Davey said: 

“It is clear from the responses that interested parties see benefits in removing the court from the process in circumstances where it is unnecessary for a court to take a decision. The Insolvency Service will be exploring with Ministry of Justice and HM Courts Services how best to realise those benefits to produce a bankruptcy system that is suitably accessible and affordable, as well as providing an efficient service for all those who need to use it. I expect that this work will result in enhanced and detailed proposals being published in due course. 

There was also support for repeal of early discharge. This requires primary legislation, and will therefore be brought forward when Parliamentary time allows.” 

The consultation, which ran between November 2009 and February 2010, gave specific consideration to the concept of a bankruptcy order on a debtor’s petition being made administratively by an official appointed by the Secretary of State, rather than being made by the court. The consultation paper welcomed views on the detail of what this new bankruptcy application process might look like, and we are grateful to all those who took the time to respond to the proposals.   

The official receiver becoming trustee on the making of the bankruptcy order and the removal of the requirement to file a ‘no meeting’ notice in some company compulsory winding up cases 

In March 2010 we also invited views on our proposals for the official receiver to become trustee of the bankrupt’s estate on the making of the bankruptcy order, and to remove the requirement to file a ‘no meeting’ notice in certain company compulsory winding up cases.  

The responses to that consultation, which closed on 31^st May, together with a revised impact assessment, have now been published and are available to view on our website at the link below:  

registerindex.htm 

We are again very grateful to all those who responded to the consultation. The views expressed have helped formulate the final policy intentions, which are to: 

1.   Allow for the official receiver to become the first trustee on the making of the bankruptcy order, thus removing the need for the current notice of ‘no meeting’ to be sent to creditors and to be filed at court; and

2.   In all compulsory liquidation cases, remove the requirement for the official receiver to issue a notice of ‘no meeting’ to creditors or file such notice at the court.

As with the proposals for the removal of early discharge, those for the official receiver to become trustee on the making of the bankruptcy order and to remove the requirement to file ‘no meeting’ notices in all compulsory and bankruptcy cases will be taken forward when Parliamentary time permits.  

Any enquiries regarding this article should be directed towards Maria Isanzu, 21 Bloomsbury Street, London WC1B 3SS. Telephone:  020 7291 6733 email: maria.isanzu@insolvency.gov.uk  

General enquiries may be directed to  policy.unit@insolvency.gov.uk   

Telephone 020 7637 1110.

51. Changes to the London Bankruptcy Jurisdiction  

With effect from 6 April 2011 the Insolvency Rules 1986 were amended by The Insolvency (Amendment) Rules 2011 ( SI 2011/785) to require lower value bankruptcy cases allocated to the London insolvency district to be presented to and heard by the Central London County Court rather than the High Court of Justice. The London Insolvency District (Central London County Court) Order 2011 (SI 2011/761) has given jurisdiction to the Central London County Court for personal insolvency proceedings.  

Generally speaking, the proceedings which will be dealt with by the Central London County Court are creditor petition bankruptcies (including those presented by Government Departments) where the petition debt is less than £50,000 and debtor petition cases where the unsecured liabilities set out in the statement of affairs attached to the petition are less than £100,000.  

There are cases where, notwithstanding these monetary limits, the proceedings will continue to be presented in the High Court:- 

• where the bankruptcy petition is being presented against a member of a partnership being wound up by the High Court in London; 

• where the debtor is not resident in England and Wales and has not carried on business or resided in England and Wales in the 6 months before the presentation of the petition; and 

• where the petitioner is unable to determine the debtor’s place of residence and place of business. 

From a practical viewpoint any change in process, especially in the short-term, will be negligible because bankruptcy petitions will continue to be administered by officials in the Thomas More Building at the Royal Courts of Justice. Later in the year it is proposed that bankruptcy petitions issued in the High Court will be dealt with in a new High Court building (the Rolls Building) which is due to open in October 2011.     

The changes to the Insolvency Rules  apply where a bankruptcy petition is presented on or after 6 April 2011, except where the petition is pursuant to a statutory demand to which Rule 6.4(2A) applies in which case they apply where the statutory demand is dated on or after 6 April 2011. The High Court will also have discretion to transfer proceedings allocated to it prior to 6 April 2011 to the Central London County Court. 

The rule changes also provide for the allocation of applications to the court in debt relief proceedings under Section 251M and 251N of the Insolvency Act 1986 and apply where the first application is made on or after 6 April 2011.   

As well as the principal legislative changes some minor changes will be made to statutory forms 6.1, 6.2, 6.3, 6.7-6.10 and 6.27 (forms for statutory demands, creditor petitions and debtor petitions). Amended versions of these forms will be made available on the Insolvency Service website.  

A link to The Insolvency (Amendment) Rules 2011 has been included on the Insolvency Service website at:

 http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/legislation/uk/legislation.htm  

Any enquiries regarding this article should be directed towards Tom Phillips, Zone B, 3^rd Floor, 21 Bloomsbury St, London WC1B 3QW telephone: 0207 637 6421 email: tom.phillips@insolvency.gov.uk 

General enquiries may be directed to email: Policy.unit@insolvency.gov.uk

Telephone 0207 291 6740

52. Statements of Insolvency Practice (SIPs) – review and updating  

At the meeting of the Joint Insolvency Committee held on 20 June 2011, the Recognised Professional Bodies, the Insolvency Service and the Insolvency Service Northern Ireland agreed that, as an interim measure pending issue of revised SIPs, certain provisions of SIP 3 and SIP 9 should be relaxed to allow for changes in practice.  SIP9 is currently under review and SIP3 has been identified for review shortly.

The details are:

SIP 3

Paragraph 3.8 requires that a copy of the R3 booklet “Is a voluntary arrangement right for me?” to be sent to debtors.  However, it is now common practice (and expected by OFT) for debt management companies to provide the Insolvency Service booklet “In debt – dealing with your creditors”.  As a result, there could be circumstances where a debtor receives both booklets.

It has been agreed that it would be appropriate for either booklet to be used by insolvency practitioners.

SIP 9

In certain circumstances, where an office-holder is replaced or where an office-holder takes a sequential appointment (for example, if a CVL follows administration), further approval is not required for the basis of remuneration.  The way in which Category 2 disbursements are approved is, of course, separate and, in the circumstances described, under the current SIP further approval would be needed for these disbursements.

It has been agreed that if an office-holder has obtained approval for the basis on which a charge for Category 2 disbursements is made, that basis may continue to be used where further approval of the basis of remuneration is not required.

The position of insolvency practitioners

With immediate effect, the Secretary of State and the Recognised Professional Bodies will interpret SIPs 3 and 9 for monitoring purposes as if they had been amended to take account of the above matters.  

General enquiries may be directed to IPPolicy.Section@insolvency.gov.uk  Telephone: 020 7291 6772

53. Consultation: Reform of the process to apply for bankruptcy and compulsory winding up 

Government announced a public consultation on 7 November 2011 about proposals to reform the way people access bankruptcy and compulsory winding-up – both in respect of petitions presented by debtors (the subject of previous consultations in 2007 and 2010*) and those presented by creditors and third parties. The proposals about winding-up relate specifically to petitions on grounds of inability to pay debts and that the company has passed a special resolution for compulsory winding-up.

* The previous consultations can be accessed by clicking the following links:

Initialstageconsultationpaper.doc

Debtor%20Petition%20Reform%20Final%20Nov%2009.pdf)

The vast majority of creditor petitions are not contested at a court hearing, so the aim is to provide a streamlined administrative route where there is no dispute between the parties. Court focus would then be on the more complex cases that rightly require detailed consideration.

A new pre-application process would require creditor applicants to demonstrate that they have taken all reasonable steps towards reaching a mutually satisfactory solution to the debt problem, before instigating proceedings. Debtors would be encouraged to seek early, free, independent advice. This reflects Government’s desire that people are empowered to make the right decisions for themselves about their finances. The earlier a debtor seeks advice, the more likely it is that they will be able to make a constructive proposal to their creditors.

Where a creditor wishes to proceed with an application, this would be made to a new office of the Adjudicator, based within The Insolvency Service. This office would also receive debtor applications for bankruptcy. Debtors would have an option to pay both the application fee and Official Receiver’s deposit by instalments, although full payment would have to be made before their application could be considered by the Adjudicator.

More streamlined access would lead to greater efficiencies; quicker access, where appropriate; a facility to apply on-line; and lower application fees.  The level of safeguards is an important part of the proposals – so that there are better outcomes for debtors whilst creditors’ rights are respected.

The consultation document can be found on our website at: http://www.bis.gov.uk/insolvency. Responses should be sent to: policy.unit@insolvency.gov.uk by 31 January 2012.

Any enquiries regarding this article should be directed towards Maria Isanzu telephone: 0207 291 6733 email: Maria.isanzu@insolvency.gov.uk

General enquiries may be directed to email Policy.unit@insolvency.gov.uk
Telephone : 0207 637 1110

55. Launch of Public Consultations on proposed closures of Insolvency Service offices in Bournemouth Medway and Stockton  

On 27 March 2012 The Insolvency Service issued public consultations on the proposed closures of our offices in Bournemouth, Medway and Stockton.  

The purpose of the consultation is to gather further information and comments from the public and stakeholders about the impact of the three proposed office closures. The views expressed and information received from the consultation will become part of the evidence that The Insolvency Service will use to decide whether or not to close an office.  

The Insolvency Service is largely fee-funded from insolvency case deposits and asset realisations. Bankruptcy cases reached record levels in 2009 but have since fallen very substantially.  That fall means that The Service must reduce its costs and become more operationally flexible in the future. 

Following consultations with staff, Trade Unions, and key stakeholders during the summer of 2011, The Service announced a planned re-organisation and a reduction in the size of its office network (the Delivery Strategy).  The re-organisation will lead, over time, to a new, more centralised approach to delivering most services which will reduce costs and provide greater flexibility to adapt in future to increases and decreases in workload.  

The proposed closure of the three Insolvency Service offices mentioned above is one of the early stages of implementing The Service’s longer term plans.  All staff in the three proposed offices will be offered posts in their nearest alternative Insolvency Service office.  The Service does, however, acknowledge that not all of its staff in these offices will be able or willing to take up the posts offered for either personal or practical reasons.  

The number of customers affected by these proposals is predominantly limited to those bankrupts or company officers whom The Insolvency Service require to have a face to face interview.  (These will in general be people where The Service has some concerns about, for instance, limited information, their conduct or the security of assets.)  The number of such people who would be affected is relatively small and in the majority of cases they are likely to be required to attend for interview on only one occasion. Further analysis and details of estimated volumes of face to face interviews for each location are set out in the public consultation documents.

As is current practice, The Insolvency Service remains committed to ensuring that reasonable adjustments are made for customers who have accessibility issues or special requirements. Please see the Equality Impact Assessment for further details in regards to this.  

The public consultation started on 27 March 2012 and will close on 22 June 2011. The public and stakeholders can send their feedback to Delivery.Strategy@insolvency.gov.uk.  

The public consultation documents can be found here http://www.bis.gov.uk/insolvency/news/news-stories/2012/Mar/public-consultations. 

The Insolvency Service welcomes your views. 

Any enquiries regarding this article should be directed towards  Tony Ryan, head of Strategy and Research, The Insolvency Service, 21 Bloomsbury Street, London WC1B 3SS  telephone: 020 7291 6750, email: tony.ryan@insolvency.gov.uk

56. Investigation Hotline Publication 

The leaflet formerly know as “The Enforcement Hotline” has been updated and expanded to reflect the changing remit of The Insolvency Service’s hotline team. The publication details current complaint routes and has been renamed “What is the investigations hotline?” 

Practitioners may find the publication useful either when reporting matters unconnected to their statutory duties, or to provide information to the public about complaint routes in circumstances where the complaint is not connected to their role as office holder. 

In particular the hotline now aims to capture; 

• complaints about live companies; (previously submitted via a separate route to what was Companies Investigation Branch)
• complaints about the re-use of prohibited company names; and
• information about the conduct of:
  • directors;
  • disqualified directors ;
  • undischarged bankrupts;
  • individuals subject to debt relief orders; and individuals subject to restrictions.

Where an Official Receiver or insolvency practitioner is in office then the hotline encourages the complainant to contact the office holder, but will receive (& forward) complaints addressed to it when necessary. 

The publication provides a guide to the various methods of complaint and a complete list of various contact points depending on the nature of the complaint.  

The publication is now available online only and further information about the hotline is available on our website (this information is currently being upgraded to reflect the publication and to make the site more user friendly). You can obtain copies of this new publication from, and refer any enquiries to, The Insolvency Service’s website: The Insolvency Service | BIS 

Any queries or comments regarding this notice should be sent to intelligence.live@insolvency.gov.uk

57. Rejection notices post submission of a section 120 notice to the Pension Protection Fund 

The Pension Protection Fund (PPF) intend to stop sending formal rejection notices to insolvency practitioners following the submission of a section 120 notice if the scheme is not an eligible defined benefit scheme, as it is not a statutory requirement under the Pensions Act 2004.  However, as long as practitioners provide their email address when submitting their section 120 notice, the PPF will send an email informing practitioners if the notice refers to an ineligible scheme.  The PPF will allow practitioners to supply an email address by revising both the section 120 notice and the website which allows the submission of forms electronically.  Until these changes are made, the current procedures will remain in place. It is estimated that the new system should be operational by 1 September 2012. 

Any enquiries regarding this article should be directed towards Joseph Sullivan of IP Regulation Section, telephone: 020 7637 6495,
email:  joseph.sullivan@insolvency.gov.uk  

General enquiries may be directed to email: IPRegulation.Section@insolvency.gov.uk , Telephone 020 7291 6772

58. Insolvency legislation to be reviewed in the Red Tape Challenge  

The Red Tape Challenge (RTC) is an ambitious, pan-Whitehall programme to reduce and improve the stock of regulation on the statute book, drawing on comments made by business, civil society organisations and the public.  The programme is led by the Cabinet Office and BIS (The Insolvency Service’s parent department), and aims to root out unnecessary, overcomplicated regulation that strangles business and economic growth. 

Regulations are grouped in themes and each theme is featured on the Cabinet Office’s RTC website for a period of five weeks, during which people are able to say whether the regulations should be scrapped, simplified or achieved in a non regulatory or less bureaucratic way.  Being a major plank of the Government’s deregulatory agenda it is likely to attract widespread media attention during at least part of the live period. 

The insolvency theme will be launched later this summer.  During the five weeks following the launch stakeholders and the public will be able to comment on 111 insolvency ‘regulations’.  These regulations are the primary and secondary legislation that sets out the how insolvency procedures work, the obligations of insolvency office-holders and the disqualification regime.  The regulations include the Insolvency Act 1986, the Insolvency Rules 1986, and the various amendments made since their enactment – however, Fees Orders are out of scope.  A full list of the insolvency regulations that will be included in this exercise will be published on the Cabinet Office website at http://www.redtapechallenge.cabinetoffice.gov.uk/home/index. Much of the amending legislation already falls within the existing project to consolidate and modernise the Insolvency Rules.  To ensure that comments made as part of the RTC are taken into account in the Insolvency Rules project, it is now unlikely that a formal consultation on the draft Rules will be issued before 2013. 

The Insolvency Service has invited Philip King, CE of the Institute of Credit Management, to act as the Sector Champion for insolvency – representing the interests of those who can be expected to benefit from regulation, and acting as a link between the sector and Government. 

Once the theme window closes, The Insolvency Service will produce a set of proposals on regulatory reform, which are then reviewed by a Ministerial ‘Star Chamber’ with the presumption that all burdensome regulations will go unless Departments can justify why they are needed – well-defined and necessary regulation will be kept.  Progress on each theme is available on the Cabinet Office website and in addition we will announce future progress both in Dear IP and on the Insolvency Service website. 

Insolvency Practitioners will clearly have their own views on and hands on experience of the various pieces of insolvency legislation and so we would be pleased to receive your comments.  Comments can be made publicly on the Cabinet Office website or privately by emailing redtapechallenge@cabinet-office.gsi.gov.uk. 

More information about the RTC is available at: http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/

Any enquiries regarding this article should be directed towards Mike Chapman, The Insolvency Service, Policy Unit, 4^th Floor, 4 Abbey Orchard Street, London, SW1P 2HT; telephone: 020 7291 6765, email;  Mike.Chapman@insolvency.gov.uk 

General enquiries may be directed to Policy.Unit@insolvency.gov.uk, Telephone 020 7637 1110

59. The Enterprise and Regulatory Reform Bill 

Repeal of Early Discharge 

The Enterprise and Regulatory Reform Bill is currently going through Parliament.  It contains a clause which seeks to repeal section 279(2) of the Insolvency Act 1986, commonly known as early discharge. The effect of the repeal is that all bankrupts would be automatically discharged after 12 months providing they are not subject to any restrictions or their discharge has not been suspended.  

The objective is to reduce the financial and administrative burdens on business and government and make the bankruptcy process in England and Wales as efficient, consistent and transparent as possible and would result in a total net benefit to business of £0.6 million per year. 

Progress on the bill can be followed by accessing the link below:  

http://discuss.bis.gov.uk/enterprise-bill/  

Any enquiries regarding this article should be directed towards Muhunthan Vaithianathar, telephone: 020 7637 6515.
Email:  muhunthan.vaithianathar@insolvency.gov.uk

60. Update on the Red Tape Challenge ‘Insolvency Theme’ 

The insolvency theme was in the ‘spotlight’ on the Red Tape Challenge (RTC) website from 23 August to 27 September 2012. Along with publishing 115 regulations on the website, The Insolvency Service issued an information paper, alerted our major stakeholders to the theme, and published articles in newsletters and magazines targeted at insolvency practitioners and repeat creditors from the business community. We also alerted individuals, directors and creditors who received communications from our London Official Receiver office in September to the theme spotlight in order to get ideas from people going through the process. Our sector champion, Philip King, CE ICM, held a workshop with stakeholders at which ideas were discussed that had a broad measure of support from a wide range of stakeholders.

Although the theme generated only a small number of online posts and emails via the RTC website,  R3, some of the RPBs and legal groups sent in more substantive comments by email during October. 

         The main areas put forward by stakeholders for change were:

·        greater electronic communication with creditors;

·        reduce the volume of hard copy information provided to creditors;

·        remove banking restrictions for some types of insolvency procedures;

·        reduce the burden on office-holders to maintain records of time spent on a case;

·        give office-holders discretion not to pay dividends where it was uneconomic to do so, with agreement of creditor;

·        remove the default of holding physical meetings in insolvency processes;

·        enable creditors to extend period of administration by 12 months and provide for continuity of supply of  IT and other essential goods / services in administration;

·        allow administrators to disclaim and

·        reduce the number of the different types of disqualification returns, and simplify the process for reporting to the Secretary of State.

·        introduction of specialised personal/corporate authorisation for insolvency practitioners and

·        removal of requirement for insolvency practitioners to obtain ‘sanction’ to commence certain actions.

In total we received or generated about 150 ideas, about two thirds of which we think are worth exploring further.

The Insolvency Service will now produce deregulatory proposals which will be considered by Ministers in early 2013.

More information about the RTC is available at: http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/

Any enquiries regarding this article should be directed towards Mike Chapman, The Insolvency Service, Policy Unit, 4^th Floor, 4 Abbey Orchard Street, London, SW1P 2HT; telephone: 020 7291 6765; email: Mike.Chapman@insolvency.gov.uk

General enquiries may be directed to Policy.Unit@insolvency.gov.uk; Telephone 020 7637 1110