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The government has launched a call for evidence and is seeking views on the impact of the regulatory objectives introduced for the insolvency profession in 2015.
Stakeholders are also being asked to assess whether there would be potential benefits in making changes to the current system, including establishing a single regulator for insolvency practitioners.
Responses are welcome from insolvency practitioners, Recognised Professional Bodies, trade bodies, creditors and their representatives, debt charities, and other interested parties by 4 October 2019.
Any proposals emerging from this call for evidence would be subject to further consultation.
The Insolvency Service and the Accountant in Bankruptcy worked together on a project to modernise and consolidate the corporate insolvency rules in Scotland, following a similar project in England and Wales which produced the Insolvency (England and Wales) Rules 2016. The project was assisted by a working group drawn from insolvency practitioners, lawyers, regulators, creditors and representatives from Companies House.
The devolution position for corporate insolvency is complex, with competence for winding up being divided between the UK and Scottish Parliament (the “general legal effect” of winding up is reserved to the UK Parliament and the “process” of winding up is devolved to the Scottish Parliament). Agreement was reached across the UK and Scottish Parliaments to include the rules for winding-up within the Scottish Statutory Instrument as these are largely devolved.
The new rules are contained in two instruments:
- The Insolvency (Scotland) (CVA and Administration) Rules 2018/1082 (I(S)CVAAR) made by the UK Government which make provision in relation to the reserved insolvency processes of CVAs and administration
- The Insolvency (Scotland) (Receivership and Winding Up) Rules 2018/347 made by the Scottish Government (I(S)RWUR) which make provision in relation to the devolved process of receivership and the mixed-competence process of winding up.
Whilst the rules are now contained in two instruments, care has been taken to ensure that the layout, language and rules common to all processes are as similar as possible. In addition, the provisions relating to receivership which were contained in the Receivers (Scotland) Regulations 1986 1986/1917 have been incorporated into the I(S)RWUR.
In order to assist users the Insolvency Service and the Accountant in Bankruptcy have prepared tables of derivations for the I(S)CVAAR and I(S)RWUR which have been published on our respective websites.
Consequential Amendments to the Scottish Rules
Two instruments were laid on the 1 July 2019 which make consequential amendments to the Scottish Rules:
- The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2019
- The Insolvency (Scotland) Rules 2018 (Miscellaneous Amendments) Rules 2019
The Insolvency (Scotland) Rules 2018 (Miscellaneous Amendments) Rules 2019 also contain minor corrections and clarifications to the (I(S)CVAAR) and to the (I(S)RWUR). Both instruments came into force on the 23 July 2019.
Insolvency Live! was held on 12 July 2019 in London.
Around 80 insolvency practitioners, debt advisers, creditor representatives, regulators and others joined senior staff from the Insolvency Service to hear what we are working on, ask questions and share feedback.
Our Insolvency Service Chairman Steve Allinson hosted the proceedings and opened with a speech that reflected on how the Insolvency world has been thrust into the spotlight over the past 12 months. Carillion, controversy about CVA’s in the retail sector, a number of large pre-pack rescues and now British Steel have all held prominent places in the headlines. He also outlined how the Government continues with intentions to reform the insolvency regime.
We then welcomed Daniel Kelly from the newly formed Money and Pensions Service (MAPS). Daniel gave an overview of how MAPS aims for everyone making the most of their money and pensions. He specifically went into detail about the target operating model for the debt advice sector which aims to see 500,000 more debt advice sessions by 2023.
The day continued with sessions and workshops including:
- Breathing Space and the Statutory Debt Repayment Plan
- our legal and investigation story and our enforcement strategy journey
- outlook for insolvencies
- Insolvency Service senior leadership Q&A
- IP regulation
- Insolvency policy projects
- Official receiver’s workshop for money advisors
The PowerPoint slides from some of these sessions are available on request.
The Insolvency Service Annual Report 2018-19 was laid in Parliament on 23 July 2019 and is now available online. In the report, our Chief Executive, Sarah Albon, discusses the agency’s challenges and achievements during the period, while looking forward to the coming year.
Highlighting a couple of milestones, Sarah reports on the granting of the 250,000th Debt Relief Order (DRO) as well as marking the 10th anniversary since the DROs introduction. Sarah also discusses the collapse of Carillion and how it was the largest, most complex liquidation the Insolvency Service has faced.
Later on in the report we look at the Carillion case in some detail, showing the scale of the liquidation. We’d identified 379 companies as part of the Carillion group, with 123 of these based overseas, while the Official Receiver is currently the liquidator of 78 companies.
The complexity of the case means that no date has yet been set for when the liquidation will end. The Official Receiver will continue to work with colleagues at PwC to resolve any outstanding matters as quickly as possible in 2019-20.
Elsewhere, we also report that 1,242 directors were disqualified for misconduct during 2018-19, with an increased percentage in those banned for 10 years or more. One of the more high profile disqualifications during the year was that of Howard Grossman and his failed development of Northampton Town’s stadium.
We also report on achieving reaccreditation of the Customer Service Excellence (CSE) Standard, which recognises our continued focus on putting our customers at the heart of everything we do.
Two directors of Varden Nuttall Limited, a debt solutions provider based in Bury, banned for 16 years after lack of oversight led to a £7.6 million shortfall in monies being held for insolvent estates.
Jailed restaurateur banned from running companies for 12 years after he was found to owe HM Revenue and Customs (HMRC) over £1 million.
Former solicitor has bankruptcy restrictions extended for nine years after he made loans to clients using money that was held in trust by the firm.
A convicted counterfeit watch dealer from Brighton has had his bankruptcy restrictions extended for eight years.
Insurance boss who caused company to be negligent in its responsibilities while administering a pension scheme has been banned for seven years.
Sevenoaks second-hand car dealer disqualified for mis-selling luxury vehicles and misappropriating £77,000 worth of customer’s funds.
Disqualified boss sentenced after using his son and long-term associate as directors to help him run Halifax company illegally behind the scenes.
View our latest statistics releases on company and individual insolvencies.
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