New Insolvency Rules
Modernisation and consolidation are the focus of The Insolvency (Amendment) (No. 3) Rules 2009, which are published in draft form by the Insolvency Service and are due to come into force on 6 April 2010.
Fortunately they are accompanied by a consolidated version of the Insolvency Rules 1986 showing tracked changes introduced by the "Modernisation Draft Rules". Also useful - and readable, at only 19 pages - is the Stakeholder Commentary.
There's a fair amount of detailed change for insolvency professionals to assimilate, but a few tasters from the Stakeholder Commentary are:
- The remuneration of office-holders may be set as a fixed amount instead of, or in addition to, a percentage of the value of property dealt with or a time charge. Remuneration may consist of a combination of any two, or all three, of these bases.
- Provision is made for an administrator or other qualified insolvency practitioner to be able to recover remuneration charged and expenses incurred before the formal start of the administration, of particular importance in what have become known as “pre-pack administrations”.
- One of the key facets of the modernisation reforms is to facilitate the delivery of documents electronically. With this in mind the amending Rules make a number of provisions facilitating the sending of documents by electronic means. The general principle found in Rules 12A.7 and 12A.10 is that documents may be delivered by electronic means provided that the recipient has consented and provides an electronic address.
The Insolvency Service notes:
- The Rules amendments have been prepared with the benefit of extensive stakeholder input and they are not issued now for further consultation, which would delay the delivery timetable. Instead, we are seeking comments concerning any errors or drafting difficulties that may be found within the draft Rules. Please note that the draft Rules being published here are currently under review with the Insolvency Rules Committee and therefore may be subject to some further revision.
- Any enquiries regarding the above should be directed towards Neil Ogilvie, Policy Unit, Area 5.7, 21 Bloomsbury Street, London WC1B 3QW; e-mail Neil.Ogilvie@insolvency.gsi.gov.uk
Chris Laughton is a Restructuring & Insolvency partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Chris you can call him on 020 7353 1597.
Date: 6th November, 2009
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