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23/03/2015

BIS/Scottish Affairs Committee & Collective Redundancy - R3 Comments

Responding to the parliamentary report on the City Link administration and the announcement by the Insolvency Service (23/3) that it has launched a call for evidence on redundancy consultations in insolvency, Phillip Sykes, vice-president of R3, the insolvency trade body, says:

“R3 recognises concerns raised in the Joint Committee’s report. We welcome steps to improve transparency and communication for creditors as these are important foundations for effective creditor engagement in the insolvency process.”

“The UK’s insolvency regime is one of the world’s most effective, but it should always be kept under review to ensure it continues to meet modern business and creditor needs. We agree with the Committee that any review of the statutory order of payments needs to be carried out carefully to avoid unintended consequences.”

“We also agree that the separate sets of rules on redundancy consultations and insolvency are looked at in tandem to remove areas of friction. The insolvency profession is often placed in a difficult position when it is required to balance the sometimes contradictory legal requirements of employees and creditors. The government understands the tensions that exist in this area and we shall work constructively with the government to resolve them. We welcome the ‘call for evidence’ on this topic announced by the government this morning.”

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.