The principle behind guidance to Official Receivers (the OR) on handing of cases to Insolvency Practitioners remains that the OR is appointed as liquidator/trustee as a result of bankruptcy or winding up orders made by the court, and will remain as liquidator/trustee unless:

·         the majority of creditors by value seek the appointment of an Insolvency Practitioner to replace the OR as liquidator/trustee,

·         25% of creditors by value requisition a decision procedure for the purpose of removing the OR, and the OR is replaced as office holder, or

·         the OR thinks the skills of an Insolvency Practitioner are required.

This guidance has been in place for a number of years and was last set out in Dear IP in June 2017. It is referred to in the Guidance to Official Receivers on Gov.uk.

The number of cases passed from the OR to Insolvency Practitioners reflects the position that the OR provides an essential public service in providing a debt relief solution for cases with little, if any assets. Around 90% of bankruptcy and compulsory winding-up cases have insufficient assets to cover the Administration and General Fees, and over half of the cases have no assets.  An Insolvency Practitioner is appointed in succession to the OR in around a fifth of compulsory winding-up cases, and a third of creditor petition bankruptcy cases. 

Information has been recently published on levels of statutory fee recovery made on bankruptcy and compulsory liquidation cases from 2017/18 to 2021/22. It can be accessed through the following link:

Levels of statutory fee recovery on Bankruptcies and Compulsory Liquidations, 2017/18 to 2021/22.

Official Receiver Services (ORS) is keen to work alongside Insolvency Practitioners to ensure the best overall outcome for creditors in our insolvencies. The ORs have been looking at a range of schemes to facilitate contingency planning measures that could be deployed if they had insufficient capacity to undertake their current level of trustee and liquidator work. With assistance from R3, ORS has been working with a small group of volunteer Insolvency Practitioners to explore options.

ORS is looking to consider if cases where potential civil recoveries are identified, but where the OR would have normally remained as liquidator, could be passed to an IP to be dealt with. ORS is seeking to understand, for example, the minimum value of the potential recoveries needed for them to be suitable to be dealt with by an Insolvency Practitioner. The group is also considering if, and in what circumstances, cases where the OR has not identified material assets or potential recoveries could be handed over to an Insolvency Practitioner, to see if the Insolvency Practitioner can make recoveries for the benefit of creditors.

Please send any queries relating to the above to [email protected].

Rob Peck