Preparing for the Scottish Insolvency Rules 2018
By David Menzies, Director of Practice
26 February 2019
The Insolvency (Scotland) (Company Voluntary Arrangement and Administration) Rules 2018 (the 2018 CVA and Admin Rules) and The Insolvency (Scotland) (Receivership and winding up) Rules 2018 (the 2018 Receivership and winding up Rules), (referred to jointly as the 2018 Rules) come into force on 6 April 2019.
They bring with them the biggest changes made to corporate insolvency proceedings in Scotland in more than a generation.
The 2018 Rules not only consolidate the Insolvency (Scotland) Rules 1986 and all amendments made to those rules in the past 32 years but also significantly modernise, simplify the language used and bring into effect other changes in legislation.
This page will be regularly updated as a gateway to and summary of other articles on icas.com which are being prepared to inform and support the insolvency profession and other stakeholders as they prepare for the new regime.
Need to know
The immediate change which will be noted is that the Rules have moved from a single set of rules covering all insolvency processes into two sets of rules – one covering CVA and Administration and the other covering Receiverships and all forms of winding up (MVL, CVL and court liquidation). This has been necessary as the processes are controlled by the UK Parliament and the Scottish Parliament respectively under devolution arrangements. Separate sets of Rules are therefore required to gain the relevant parliamentary approvals.
Action required
The 2018 Rules will result in a significant change to procedures adopted throughout an insolvency process and represent a significant compliance risk due to the volume of changes being brought in.
The amount of work likely to be involved should not be underestimated. If you have not already started planning for the change don’t delay any further. Some points to consider include:
- If you don’t already know, find out from any case management software supplier what their plans are to manage the changes required, when software updates will be available and what you will need to do.
- Plan for staff training. Staff will need to know what the changes are and how this will impact on their work.
- Plan how document templates, checklists and diaries are to be updated. Consider whether you have the resources internally to do this or whether an external resource is required.
- Remember the transitional provisions mean that the 2018 Rules will apply in many aspects to existing as well as new cases on or after 6 April 2019.
Articles
- HMRC guidance on relating to CVL appointments
- MVL interest - HMRC position statement under forthcoming insolvency rule changes
- SIP amendments for new Scottish Insolvency Rules
- Scottish Insolvency Rules are changing: Summary of changes
- CVL commencement under the Scottish Insolvency Rules 2018
- Communications under the Scottish Insolvency Rules 2018
- Decision making under the Scottish Insolvency Rules 2018
- Time periods under the Scottish Insolvency Rules 2018
- Claims under the Insolvency Scotland Rules 2018
- Companies House Forms - Insolvency Scotland Rules 2018