The Insolvency Service newsletter, Summer 2020

Web Version | Update Preferences | Unsubscribe

Twitter Share

Summer 2020


New legislation provides breathing space for businesses affected by coronavirus


The House of Lords has completed its consideration of legislation introduced by the Government to give businesses whose survival is impacted upon by COVID-19 the essential breathing space they need to plot a path to sustainable futures.

The Corporate Insolvency and Governance Bill:

  • introduces a new 20-day renewable moratorium period, overseen by a Monitor who must be a licenced insolvency practitioner, during which businesses will be protected from creditor action to enable them to seek specialist restructuring advice or a rescue
  • includes a new restructuring plan that introduces cross-class cram down to bind creditors to it, even those that vote against it - coupled with important safeguards for affected creditors in these situations, including that a court sanctions the plan as fair and equitable
  • extends ‘essential supplies’ rules to companies using a moratorium or other insolvency procedures to prevent suppliers from ceasing service or changing their terms for goods and services they need to continue to trade, ensuring that a rescue is not jeopardised. However, protections are in place to ensure payment for these services and the ability to seek approval to cease supply where this causes hardship
  • temporarily suspends parts of insolvency law to support directors to continue trading through the emergency without the threat of personal liability for wrongful trading, and to prevent statutory demands from being served and restricting winding up petitions from being presented until 30 September 2020 if the pandemic is the reason the company is unable to pay its debts. These provisions that can be extended by regulation if necessary
  • amends company law and other legislation to provide companies and other bodies with temporary easements on company filing and annual general meeting requirements.

We have published factsheets which provide further detail on these provisions.

The Bill will now return to the House of Commons for its final consideration of amendments made in the House of Lords and is expected to receive Royal Assent and come into force by the end of this week.

The 240-page bill has benefitted considerably from the input of insolvency, creditor, legal and other stakeholders. You can read the blog by our Head of Policy, Paul Banister, on the challenge of drafting the Bill at pace to respond to the unique challenges businesses have experienced as a result of the pandemic.

We have partnered with R3, the trade body for insolvency practitioners, to deliver two webinars to explain different aspects of this new legislation:

If you are unable to make these sessions, or want to view them again, they will be recorded to enable you to watch them at a time convenient for you.


The role of the monitor

In order to give insolvency practitioners time to prepare to take on the new role of Monitor of a business in a moratorium we have published draft guidance which sets out the principal duties and actions required of them. This guidance will be finalised and reissued once the Bill has completed its passage through Parliament.

Confiscation Orders for former packaging bosses

Earlier this year, the Insolvency Service successfully secured the conviction of two packaging bosses. Mark Bottjer was sentenced after he ran companies in breach of previous bans, while Susan Hearn was convicted of aiding and abetting him.

Following the sentence results, we sought Confiscation Orders under the Proceeds of Crime Act. On 12 May 2020 at Chelmsford Crown Court, Mark Bottjer and Susan Hearn were ordered to pay confiscation of more than £83,000, along with costs.

Seeking confiscation is one of the tools at the Insolvency Service’s disposal and sends a warning to other directors that breaching their restrictions could not only result in criminal prosecutions but the proceeds of criminal conduct being confiscated as well. They differ from Compensation Orders, introduced in 2015, which enable us to seek redress from disqualified directors of an insolvent company to recompense a specific creditor or class of creditors where the misconduct has caused that loss.

The Insolvency Service has been successful in obtaining 16 Confiscation Orders since this work was transferred to us in 2017. In 2019 we obtained 5 Confiscation Orders with a total sum of £58,858.

Insolvency Live! 2020

Insolvency Live!

Earlier this year we invited feedback to help design the agenda for Insolvency Live! 2020, our annual forum for insolvency and debt advice professionals. It had been our intention to host the event in London in late July as in previous years. Social distancing and travel restrictions now make this impractical and we intend to go ahead with a virtual forum in November. Further details will be provided in the coming months. We would be happy to receive further suggestions for the agenda and you can also ask to be emailed when registrations open by sending us a message to

Delivering our services during the COVID-19 pandemic

It’s now been 14 weeks since government stay-at-home instructions were given to combat the pandemic and like most organisations we’ve taken steps to ensure we can continue to deliver our public services. Following instructions to stay at home we closed all our offices and our 1,600 staff have since been working from home. Recent investment in our IT infrastructure has enabled most services to continue without disruption.

Specific actions to keep our services running include:

  • publishing a new directory of guidance to enable people to self-serve and provide answers to frequently asked questions about redundancy, personal insolvency and Official Receiver functions. This is assisting customers who would previously have called our helplines which are closed as staff cannot access them remotely. We have instituted an email enquiry service for queries which are not covered by this guidance. The dedicated helpline for insolvency practitioners reopened on 23 March
  • changing our processes to allow the use of electronic signatures on requisitions and accepting electronic payments for IVA arrangement fees
  • replacing physical correspondence with email or messaging via the notify service
  • working with the Individual Voluntary Arrangement Standing Committee to provide guidance for IVA supervisors on the flexibility they should show when a individual affected by the Covid-19 pandemic experiences a change in their circumstances
  • supporting the insolvency profession with regular updates to Dear IP and issuing a Temporary Insolvency Practice Direction to provide guidance for court hearings

We are continuing to review and adapt our working practices to meet the needs of our customers as best as we can and we welcome your feedback and ideas about further improvements we could make

Monthly insolvency statistics to monitor impact of COVID-19

To assist the Government and the insolvency sector in monitoring the impact of COVID-19 we have introduced a new monthly statistics bulletin to improve the timeliness of insolvency information. The experimental series began in April and is published in the middle of the following month of the period being reported upon. The data presented covers new company and individual insolvencies in England and Wales, and related statistics for Northern Ireland. Company statistics are also presented for Scotland.

Two sets of statistics have been published so far and these show a fall in individual and company insolvencies immediately after UK lockdown was applied on 23 March. The next monthly bulletin will be published on 14 July on We will continue to publish the more comprehensive quarterly insolvency statistics bulletin with the next release scheduled for 30 July, also on


Recent commentary on the Insolvency Service blog

Insolvency blog

Our Insolvency Service blog will be of intereste to those working in insolvency, and provides a forum for us to share with you the work we are doing to support those in financial distress, tackle financial wrongdoing and maximise returns. We also welcome offers of guest blogs from people working in the sector.


Recent commentary on the blog includes:

  • Protecting yourself from the scammers - for Scams Awareness Fortnight our investigator Lisa Scott shares a personal story of being approached by scammers and tips on how to recognise when something is not as it first seems
  • From panic to plan: the move to debt relief Citizens Advice DRO intermediary talks about the work she has done over the past 11 years offering debt relief to vulnerable clients

We welcome comments on blog posts and these are published after review by our moderator. You can subscribe for updates when new posts are published.

Edit your subscriptions | Unsubscribe

Twitter Share