ICAS Written response to IS Consultation re Clause 131 and 132 SBEE Bill

ICAS's response to The Insolvency Service (the Service) consultation on small debt claims as set out within Clauses 131 and 132 of the Small Business Enterprise and Employment Bill currently progressing through the UK parliament.

20 March 2015

Response to IS consultation re Clause 131 and 132 SBEE Bill


Key messages

We believe that the legislation supports the policy objective of simplifying procedures. The policy objective can be best achieved with the proposals being implemented in all types of insolvency proceedings and by being implemented in all UK legal jurisdictions. 

We are cautious in accepting that the provisions are likely to achieve significant cost reductions and time savings in insolvency processes. We believe that the quality of an insolvent's records together with creditor's attitudes will impact on the number of insolvency proceedings where the requirement to submit small debt claims will be applied either as a result of creditors disputing the amount due or the office holder believing that the insolvents records are not sufficiently accurate to be relied upon. 

We support consistency in the treatment of small debt claims across all personal and corporate insolvency proceedings. 

We broadly support the prescribed limit being set at £1,000. 

Should the prescribed limit be set at different levels in personal and corporate proceedings we would support the prescribed level in corporate proceedings being set at a higher prescribed level than currently proposed.  

We would suggest £2,500 as being an appropriate prescribed level in these circumstances.We would suggest that it would be appropriate for certain types of claims to be excluded from the small debt claim provisions. In particular -

  • associates or connected parties;
  • employees;
  • creditors claiming security rights; and
  • creditors who are not the original creditor of the insolvent (purchased debts)should not be entitled to have dividends paid without a claim having been submitted.

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