Views sought on a revised SIP 9
The Joint Insolvency Committee (JIC) is seeking views on a revised Statement of Insolvency Practice (SIP) 9 'Payment to insolvency office holders and their associates' which will apply in relation to insolvency procedures in England and Wales.
The draft SIP and Explanatory Note have been developed by a JIC working group comprising members of the profession (from firms of different sizes) and creditor representatives.
The look and feel of the revised SIP 9 differs significantly from the current version of SIP 9 as the emphasis is placed upon the qualitative value of the information provided to creditors (and other interested parties) rather than the format in which that information is supplied, or suggested to be supplied.
Responses to the consultation should be sent to firstname.lastname@example.org by 4 September 2015.
Changes to SIP 9
The look and feel of the revised SIP 9 differs significantly from the current version of SIP 9 as the emphasis is placed upon the qualitative value of the information provided to creditors (and other interested parties) rather than the format in which that information is supplied, or suggested to be supplied. This represents a significant departure from previous iterations of the SIP; a departure which is explained in more detail in an Explanatory Note. It is proposed to issue the Explanatory Note concurrently with the SIP to assist practitioners in understanding the new regulatory requirements.
The revised SIP adopts the principles and key compliance standards of all new SIPs and all legislative references have been removed. It is intended that this SIP will apply in England and Wales only, as the new legislation does not currently extend to Scotland or Northern Ireland.
In July 2013, Professor Elaine Kempson published her Report to the Insolvency Service "Review of Insolvency Practitioner Fees", which concluded that market controls on insolvency practitioners fees where not always working as intended, particularly where there was no controlling secured creditor. That report was followed by an Insolvency Service Consultation on proposals for "Strengthening the regulatory regime and fee structure for insolvency practitioners". The outcome of that consultation was to suggest a number of changes to the way in which practitioners are both regulated and remunerated.
On 3 March 2015 the Insolvency (Amendment) Rules 2015 [PDF] were laid before Parliament, and will come into effect on 1 October 2015. In summary, these rules provide that insolvency practitioners must provide an estimate of their fees in advance of the approval of the basis of their remuneration in respect of those elements that they propose to take on a time cost basis. The rules also provide for the provision of an estimate of the expenses an insolvency practitioner anticipates that they will incur. The new rules will apply to insolvent liquidation, bankruptcy and administration cases commenced after 1 October 2015.
These legislative changes have necessitated a revision of SIP 9, which does not currently cater for the provision of the estimates that will be required by statute as of October.