Insolvency Technical Update - March 2017

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david-menzies By David Menzies, Director of Insolvency

30 March 2017

Your round-up of recent developments in insolvency

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Insolvency Rules (England & Wales) 2016

A series of articles have been published on icas.com dealing with the main areas of change brought in through the Insolvency (England & Wales) Rules 2016. The series can be accessed here.

The Insolvency Service has a blog to discuss and answer questions on the Insolvency (England & Wales) Rules 2016 and their commencement. The blog can be accessed here.

England & Wales Rule amendments

Four statutory instruments have been either made by Parliament or laid in draft awaiting debate which will amend provisions relating to the introduction of the new modernised rules:

SIP changes

From 6 April 2017 SIPs 8, 10 and 12 will be withdrawn in England and Wales. On the same date a new interim SIP, SIP 6 (England and Wales) – “Decision Making” shall come into effect. Further details are available here.

Forms

Insolvency Service forms

The Insolvency Service have made available a downloadable archive of Forms used under the Insolvency Rules 1986 in order that they are available for transitional arrangements under the Insolvency (England and Wales) Rules 2016.

Companies House forms

Companies House have published a list of forms which shall be made available from 6 April 2017 to assist with filing requirements under the Insolvency (England & Wales) Rules 2016.

Bankruptcy Fees (Scotland) Regulations 2017 (Revoked)

Plans for fee increases to be applied to bankruptcies and trust deeds commencing on or after 3 April 2017 have been shelved following ICAS evidence to the Scottish Parliament’s Economy Jobs and Fair Work committee on the Bankruptcy Fees (Scotland) Regulations 2017. The Regulations provided for the Accountant in Bankruptcy to charge 8% per annum interest on any fees which remain unpaid 30 days after they are due, and would have applied to existing and new cases after 3 April 2017. The Regulations also provided for a cap on AiB audit fees however ICAS argued that the cap was not beneficial and still left the fee disproportionate to the value given by the AiB service.

The AiB will now consult further with stakeholders before bringing forward a revised set of Regulations in due course which take account of the concerns raised.

Bankruptcy applications to go 100% digital in Scotland

The Accountant in Bankruptcy has announced that they will stop accepting paper applications for bankruptcy with effect from 29 September 2017. From that date all applications will require to be submitted online via BASYS.

Revised SIP15

A revised SIP 15 relating to creditor committees in insolvency processes came into effect for all cases from 1 March 2017.

Statutory redundancy pay and minimum wages

The maximum amounts payable under statutory redundancy pay together with other employee statutory entitlements such as the national minimum wage and national living wage will increase from 1 April 2017. Further detail is available here.

Standard Financial Statement

The Standard Financial Statement (SFS) was launched on 1 March 2017 and brings together a single format for financial statements designed to bring greater consistency to the assessment of people’s income and outgoings when they are in debt. The SFS may be used to assess income and expenditure under the Standard IVA protocol.

The Accountant in Bankruptcy have issued a reminder that the Common Financial Statement (CFS) requires to be continued to be used in Scotland for assessment of contributions in Protected Trust Deeds and sequestration until a decision has been made and legislation passed to change CFS as the Common Financial Tool.

Is the legal position on PPI claims post discharge in voluntary arrangements different in Scotland and E&W?

Following the long awaited decision in Green v Wright (see legal update below), the treatment of PPI claims post discharge appears to have a different outcome in Scotland from that in England and Wales. But does it?

PPI claims

The FCA have announced that the deadline for PPI claims has been set as 29 August 2019.

HMRC contract details for trust deeds and sequestrations

HM Revenue and Customs have issued a reminder of contact information for trustees in relation to trust deeds and sequestrations.

Money Laundering Regulations 2017

HM Treasury has published in draft The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 to give effect to the 4th EU Money Laundering Directive in the UK. The regulations are being consulted on with the consultation closing on 12 April 2017.

The regulations create a new oversight regulator body,  The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) which will operate under the FCA and will aim to help improve the overall standards of supervision and ensure supervisors and law enforcement work together more effectively.

Data Protection changes

The General Data Protection Regulation (GDPR) will come into force on 25 May 2018 and introduces wide-ranging changes to UK data protection legislation. Although this may seem a long way off, it is essential that businesses begin to take steps towards compliance.  Find out more here

Accountant in Bankruptcy Stakeholder events

The AiB have announced a series of stakeholder events in April and May 2017 to engage with stakeholders from across the debt and insolvency sector. You can book for one of the events here.

Legal Updates

Green v Wright [2017] EWCA Civ 111 - The Court of Appeal have held that where the supervisor of an individual voluntary arrangement has issued a completion certificate and assets of the debtor come to light after the issue of the completion certificate, they are caught by the terms of the trust in the debtor’s proposal. In this case, a PPI claim remained in trust for the supervisor to deal with. (via Coffin Mew) Full judgement

Mikki v Duncan [2017] EWCA Civ 57 The Court of Appeal has considered whether a car purchased through a hire purchase contract would be excluded from vesting in a trustee as a tool of trade.

MacMillan v T Leith Developments Ltd (in receivership and liquidation) [2017] CSIH 23 The Inner House of the Court of Session has reversed a 40 year old decision on the meaning of 'effectually executed diligence' in a receivership. The court decided that any post-inhibition indebtedness is struck at by the inhibition with the effect that the inhibitor is entitled to rank in any distribution as if those debts had not been incurred.  (via Shoosmiths)

Topics

  • Insolvency

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