Background

The Joint Insolvency Committee (JIC) are consulting on changes to -

1. Statement of Insolvency Practice 3.2 - Company voluntary arrangements

2. Statement of Insolvency Practice 3.1 - Individual voluntary arrangements

3. Statement of Insolvency Practice 7 - Presentation of financial information in insolvency proceedings

4. Statement of Insolvency Practice 9 - Payments to insolvency office holders and their associates

The consultation commenced on 27 April 2020 and was open for a period of 12 weeks, closing on 20 July 2020. 

JIC - "The JIC recognises that these are testing times. But these are only proposed changes. There was no intention to amend the Statements of Insolvency Practice (SIPs) without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by participants in the insolvency process.The legislative changes recently announced by Government, do not have impact on the SIPs which are the subject of this consultation."

R3 Submission

A working group was formed consisting of members from the General Technical Committee, Scottish Technical Committee and Personal Insolvency Committee. Our submission was submitted on Monday 20 July 2020. Whilst the majority of the proposed changes are appropriate, we did have some comments on the changes and in this respect we commented on each tracked change version of the SIPs.

In our submission we appreciated that the proposed changes were made prior to COVID-19, however, the pandemic has altered the way the profession and others undertake work. We have seen a rapid switch to a world of virtual working and we therefore felt the SIPs may need to be further changed to reflect the current, and future, working environment of the profession and others. 

In respect of SIP 9, the application of the SIP applies to ‘all forms of proceedings under the Insolvency Act 1986’ and therefore now includes ‘The Moratorium’ introduced by the Corporate Insolvency and Governance Act 2020. We advised JIC that our members are seeking clarity as to whether the SIP does apply to the role of the monitor (an office holder) and if so, what aspects of the SIP do apply. We have sought clarity on this point and for the SIP to make reference to this in some form.

Our submissions are below.