Back to listing

10/11/2016

The Rules – what now for insolvency practitioners?

By Caroline Sumner, R3 technical director

The Insolvency (England and Wales) Rules 2016 have finally arrived and are due to come into force from the 6th of April 2017.

The consolidation of the existing rules and their 25 amendments into one single piece of legislation is welcomed and the attempts to modernise and simplify the language used should result in a piece of legislation which is user friendly and less open to conflicting interpretation.

Having said that, the 2016 Rules represent a significant departure from the current 1986 rules, both in presentation and content.

The new Rules are split into common parts which cover all insolvency procedures, so they look very different to what we are used to. Separate parts cover things like decision making, proxies and creditors’ committees, and there are also separate parts for each of the insolvency procedures.

Notably, physical creditors’ meetings have been abolished and replaced by decision making procedures such as voting by correspondence, electronic voting or virtual meetings. Physical meetings will still be allowed but only where creditors have requested one be used instead of a decision making procedure. Insolvency practitioners are also encouraged to make more use of email and websites to communicate with creditors who can opt out of receiving correspondence from office holders. Prescribed forms have been replaced with specified content. These, and a myriad of other changes, will present insolvency practitioners with a challenge over the coming months as they try to get processes and standard documentation amended in time for the April commencement.

R3 has set up a Rules working party whose focus over the coming months will be to review the new Rules, identify the changes made in detail, and produce technical materials to assist our members in gaining a proper working knowledge of the changes made and to assist in the practicalities involved in putting the changes into practice. Do look out for articles in Technical Bulletins in the coming months.

I will also be giving an introduction to the Rules at the SPG Forum on the 18th of November and a more detailed presentation at R3’s Northern Conference in March 2017. We also intend to run a series of breakfast seminars in key locations throughout February 2017 to give you an insight into the changes introduced by the new rules with respect to both corporate and personal insolvency procedures. These will be supplemented by webinars on specific topics such as the new decision making procedures and new technologies available to IPs to assist in this regard. See the Courses & Events section of our website for more details.

There will be lots of support for insolvency practitioners to look to before the new Rules come into force next April and we would encourage you to take full opportunity of all that is on offer.

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.