10 highlights for the insolvency profession in 2016
Find out what the highlights of the insolvency and restructuring year were as selected by the ICAS insolvency team.
2016 saw several significant developments for those working in insolvency and restructuring. Here are some of the most momentous highlights from the year.
1. New legislation
Over 30 years of bankruptcy legislation in Scotland was brought into the Bankruptcy (Scotland) Act 2016 which took effect from 30 November 2016.
After a long wait, the Insolvency (England & Wales) Rules 2016 were finally laid in Parliament during October 2016 and signalled the start of a significant period of work to prepare for their commencement on 6 April 2017. Work started on preparing modernised corporate insolvency rules for Scotland.
2. Pensions safe from bankruptcy
In October, The Court of Appeal issued their judgement in the case of Horton v Henry, clarifying that Trustees cannot access undrawn pension pots and bring them into the bankrupt estate for the benefit of creditors.
3. PPI belongs to the debtor after discharge – or does it?
In July, Lord Jones issued his judgement in the case of Dooneen Ltd & Othrs v Mond declaring in effect that once a trustee under a trust deed obtains his discharge that any assets remaining unrealised (which would include an unknown PPI claim) are reconveyed to the debtor. While this seemed to confirm what many in the profession understood to be the case, the judgement was appealed to the Inner House of the Court of Session who upheld the original judgement. Subsequently, permission to appeal to the Supreme Court was sought but not granted by the Court of Session and it is understood that permission to appeal has been sought directly from the Supreme Court. We wait further developments during 2017.
4. Company Director Conduct Reporting
Changes to director conduct reporting came into effect on 6 April 2016. The period to submit Director conduct reports reduced from 6 months to 3 months of the relevant insolvency date. The method of submitting the report to the Insolvency Service also changed with the introduction of the Insolvency Service portal where the case is under England & Wales or Scottish legislation. Where the case is under Northern Ireland legislation there is a new form (DCR) to be completed and emailed to the Insolvency Service, DETI.
5. Changes to tax treatment of capital distributions in winding up
The Finance Act 2016 brought some significant changes to the tax implications of Members’ Voluntary Liquidations.
The UK High Street changed when BHS went from CVA, to administration and liquidation all in the space of a few months. The intense scrutiny that followed from politicians to the man in the pub brought insolvency back as a general talking point. Employee treatment, pension deficits, the involvement of advisors and director misconduct all got aired. The fallout from this single failure can be expected to influence the profession in years to come.
Third Parties (Rights Against Insurers) Act 2010 came into effect on 1 August 2016 and amended how insured claims against an insolvent person or entity may be pursued.
The Insurance Act 2015 came into effect on 12 August 2016 and again brought with it implications for anyone arranging insurance policies as a consequence of an insolvency appointment.
8. Insolvency news goes digital
May 2016 saw the final printed edition of the ICAS publication ‘Impecunias’ and the launch of our digital communications channels to bring more news, more often and more timely. Our content increased from around 20 articles per year to over 70, around 500 tweets and over 300 LinkedIn posts.
9. ICAS as Regulator of choice
10. Increased resources
As well as providing updated case checklists arising from legislative changes, ICAS also published 10 tips to keep your practice going through incapacity, a guide to Starting in Practice as an IP, free access to checklists and templates for anti-money laundering and monthly Insolvency Technical Updates