59.44 Bookmakers – betting shop

(May 2008)

A betting shop is a premises licensed for the purpose of bookmaking. It is illegal for persons to meet and to carry on any bookmaking activity at any premises without a licence. A bookmaker based within a betting shop will require an operating licence, where applicable a personal licence and a betting premises (other) licence.

59.44A Bookmakers – operating at racetracks

(May 2008)

Bookmakers can operate as on-course bookmakers, internet bookmakers, telephone bookmakers or operate a betting shop. Where the bookmaker and the person placing the bets do not meet i.e. telephone and internet betting systems only an operating licence and where applicable, a personal licence are required.

On-course bookmakers operate at racetracks, which are licensed on their own behalf, however areas of the track may not be covered by the racetracks licence [Note 20]. On-course bets are bets taken at a meeting attended by both the person making the bets and the bookmaker accepting the bets or from a bookmaker who is not at the meeting who makes hedged bets with a bookmaker who is present at the meeting. An on-course bookmaker will require an operating licence, where applicable, a personal licence and where present at the racetrack, a betting premises (track) licence [Note 14]. Only one premises licence can have effect with regard to a specific area of the racetrack, however, a bookmaker can apply for a subsidiary licence which, if issued, transfers the licence for that specific area of the track to the bookmaker [Note 21]. The official receiver should verify the licence position when dealing with an on-course bookmaker and inform the relevant racetrack office(s).

On-course bookmakers must keep a field book, which is bound and has serially numbered pages. An entry must be made in the book for each bet, immediately after the bet is made. If an on-course bookmaker accepts bets which are not on-course bets he/she must also keep a betting duty account. [Note 22]

59.44B Bookmakers – gaming duty

(May 2008)

Betting duty is payable on the gross profit from bookmakers, excluding on-course betting, and a bookmaker must register with HM Revenue and Customs for the purpose of paying this duty [Note 23]. On-course bookmakers should be registered with HM Revenue and Customs even though on-course betting is not liable for betting duty. A bookmaker will receive a unique reference number and HM Revenue and Customs should be informed when a winding-up order or bankruptcy order is made against a bookmaker. Further details of general betting duty can be found on HM Revenue and Customs website at www.hmrc.gov.uk.  

Notice of the making of the winding-up order or bankruptcy order should be sent to HM Revenue & Customs, Greenock Accounting Centre (GAC), Custom House, Custom House Quay, Greenock PA15 1EQ.

59.44C Bookmakers – book debts

(May 2008)

Bookmakers usually operate on a cash basis, with only a small number of customers having accounts. Prior to the Gambling Act 2005 coming in to force on 1 September 2007 gambling debts were not enforceable in law (see paragraph 40.16). Since the implementation of the provisions of section 334 of the Gambling Act 2005 gambling contracts are now to be treated in a similar manner to other contracts in law. This provision does not apply retrospectively, therefore, any gambling contract made, or any right arising from an agreement made before this section came into force will not be enforceable. (See paragraph 40.103A) [Note 24]

Where an account customer owes money to the bookmaker at the insolvency order date, in relation to gambling contracts made on or after 1 September 2007, the official receiver’s agents may be instructed for collection, as these sums constitute book debts enforceable by law. Conversely, where the bookmaker owes sums in respect of uncollected winnings to people who have placed bets before the insolvency order date, these are provable debts and rank equally with other unsecured creditors.  

59.45 Charities

A charity means any institution, corporate or not, which is established for charitable purposes and is subject to the control of the High Court in the exercise of the court's jurisdiction with respect to charities [note 25]. A charity may be in the form of a trust, an unincorporated association, an industrial and provident society (see paragraphs 59.19 to 59.24), a friendly society (see Chapter 58 - Unregistered companies Part 2) or a company limited by guarantee (see paragraph 59.57).

59.46 The Charity Commission

A charity is regulated by the Charity Commission whose function is the promotion of the effective use of charitable resources, and the monitoring and supervision of charities (see Annex A). A charity must be registered with the Charity Commissioners unless it is exempt from registration or excepted. Exempt charities are generally those that are supervised by other bodies e.g. industrial and provident societies and registered friendly societies are exempt [note 26]. The main categories of excepted charities are certain voluntary schools, Boy Scout and Girl Guide Charities and certain charities for the advancement of religion and also charities with an annual income below £1,000 [note 27].

The Charity Commissioners maintain the central register of charities. The register is required to contain the name of every registered charity and such other particulars about a charity as the Commissioners think fit [note 28]. The entry for a particular charity should contain its name, objects, area of benefit (i.e. the geographical area it covers, which could be a local region, all the U.K, or world-wide), bank account details, current correspondent (the person to contact) and approximate annual income. Charities whose gross annual income or expenditure exceeds £10,000 are required to provide an annual report (see paragraph 59.48). The register is open to public inspection both in person and on the Charity Commission website, and any person is entitled to be furnished with copies of entries on the register, although a fee may be charged.

The Charity Commissioners also have powers to obtain information [note 29], carry out investigations [note 30], appoint and remove trustees (including the directors of charitable companies) [note 31] and petition for the winding up of a charitable company [note 32].

59.47 Management of a charity 

The persons having general control and management of the administration of a charity are known as the trustees of the charity. The definition of trustee is wide enough to cover the directors of a charitable company [note 33].

A person is disqualified from being a charity trustee [note 34] if, among other things  -

a) he/she has been convicted of any offence involving dishonesty or deception:

b) he/she has been adjudged bankrupt or sequestration of his/her estate has been awarded and (in either case) he/she has not been discharged or 

c) he/she is subject to a disqualification order under the Company Directors Disqualification Act 1986, an order made under section 429(2)(b) of the Insolvency Act 1986 or he/she is the subject of a BRO, BRU or an interim order.

59.48 Requirement to keep records and make returns

The Charities Act 1993 requires charity trustees to ensure that accounting records are kept [note 35]. Although the requirements of the Act do not apply to charitable companies, they are required to keep accounting records by the Companies Act 1985. Trustees of exempt charities do not have to comply with the obligations imposed on non exempt charities but they are still required to keep proper books of account by their relevant regulatory body.

A charity must prepare annual accounts [note 36] and a charity whose gross income or total expenditure exceeds £100,000 in the present or two preceding financial years must have its accounts audited [note 37]. If the gross income or expenditure exceeds £25,000 but does not exceed £100,000, the accounts may be audited or examined by an independent examiner [note 37]. Charities which are companies registered under the Companies Act 1985 must comply with the provisions of that Act regarding the preparation of annual accounts. Exempt charities, if not required to by any other Act to prepare periodical statements of account, shall prepare consecutive statements of account [note 38].

The trustees of a charity must prepare in respect of each financial year an annual report containing [note 39] -

a) such a report by the trustees on the activities of the charity during that year, and

b) such other information relating to the charity or to its trustees or officers, as may be prescribed by regulations.

Where, in any financial year of a charity, its gross income or expenditure exceeds £10,000, the annual report prepared must be sent to the Charity Commissioners within 10 months of the charity's year-end although the Commissioners may agree a longer period. If the charity's gross income or expenditure does not exceed £10,000, the annual report prepared is only sent to the Charity Commissioners if requested by the Commissioners. All annual reports sent to the Charity Commissioners must have attached accounts prepared for the financial year in question [note 40].

Charities which are companies limited by guarantee are also subject to the supervision of the Registrar of Companies. Charitable companies, therefore, have to file annual returns with both the Charity Commissioners and the Registrar of Companies. Charities registered as friendly societies are exempt charities but they are subject to the control of the FSA (see paragraph 59.15). Annual returns, including accounts, must be submitted to either the FSA or the Commission. Charities registered as industrial and provident societies (also exempt charities) are subject to the control of the FSA to whom an annual return must be made (see paragraph 59.20).

59.49 Winding up of a charity

A charitable company may be wound up voluntarily or by the court. A charity will be wound up using the provisions of the type of institution it is. For the procedures relating to the winding up of an industrial and provident society, see paragraphs 59.21, for a friendly society, see paragraph 59.16 and for companies limited by guarantee see paragraph 59.57). The winding up of a charity will in practice be very similar to the winding up of any other company and official receivers should therefore proceed with the liquidation in much the same way as normal.

A winding up petition may be presented in the usual way but additionally the Attorney General is given power to present a petition if a charitable company has failed to file annual returns for a considerable period, is inactive or difficulties have arisen over dealings with property  [note 41]. The Charity Commissioners (with the agreement of the Attorney General) also have the power to present a winding up petition but only if they have instituted a formal enquiry under the Charities Act 1993, section 8. Before presenting a petition, the Commissioners must be satisfied either that there is or has been misconduct or mismanagement in the administration of the charity or that it is necessary or desirable to act for the purpose of protecting the property of the charity [note 42].

59.50 Distribution of funds in the winding up of a charity

The winding up of a charity will in practice be very similar to the winding up of any other company and official receivers should therefore proceed with a liquidation of a charity in much the same way as normal. The principal difference will be in the distribution of any surplus funds. The memorandum of association of most charitable companies usually provides that on winding up any surplus property should not be distributed amongst the members but should be transferred to another charity. If no recipient charity for the surplus assets has been specified by the members the court will order a cy - pres scheme [note 43]. Cy - pres is a legal doctrine of the Court of equity, it enables the court to amend the donation of a charitable gift which cannot be given to its intended recipient to another similar recipient.

Gifts to a charitable company by testators whether death occurred before or after the winding up order are gifts to the company beneficially and available to the creditors of the company unless the terms of the bequest provided otherwise [note 44].

59.51 Offences

The Charities Act 1993 contains various offences, including failing to display the charity's name [note 45], supplying false information to the Charity Commissioners [note 46] and failing to co-operate with the Commissioner  [note 31]. The Charities Act 1993 provides that no proceedings relating to offences under that act shall be instituted except by or with the consent of the Director of Public Prosecutions. If the official receiver considers that any such offences have been committed, a statement of facts should be submitted to the criminal allegations team in the usual way. 

59.52 Commonhold Associations

Commonhold associations are companies (limited by guarantee, see paragraph 59.57) set up to allow freehold ownership of individual units in multiple occupancy premises such as blocks of flats, shopping precincts and office blocks [note 47]. For example, in a block of flats, the flats would be individually owned on a freehold basis and the freehold of the common areas such as the staircases, lifts, car park and gardens would be owned by the commonhold association. The flat owners are known as the "unit holders" and the common areas as the "common parts". The unit holders are the members of the company. As a company a commonhold association may be wound up subject to modifications as set out in the Commonhold and Leasehold Reform Act 2002, sections 43 to 56. As unit holders have a vested interest in making sure that their commonhold association does not enter an insolvency procedure these types of insolvencies are not likely to be dealt with regularly by the official receiver.

On the making of a winding up order (excluding any winding up order made on the grounds of public interest [note 48]) the court may make a "succession order" if it thinks it appropriate [note 49]. A succession order would provide for another ("successor") commonhold association to take over and be registered as proprietor of the common parts [note 50]. That would mean that those common parts would not be assets in the liquidation. Few assets may therefore remain in the liquidation apart from any money in the reserve fund [note 51] and (subject to the memorandum and articles and any succession order) the right to levy charges against the former unit holders for sums which should have been charged to them (e.g. for repairs, local authority charges etc). The court may also make an order that the liquidator make the records (or copies thereof) and information available to the successor commonhold association [note 52].  

Where the official receiver is liquidator he/she should, as soon as possible, notify the Land Registry (and provide the Registrar with copies of the relevant report or orders) [note 53] of: -

•  the termination of the commonhold,
•  the winding up order (no copy of the petition required),
• any directions under section 168, 
• any notice under section 172(8)  (liquidator's report on completion of winding up),
• any notice under section 174(3)  (release of liquidator),
• any application under section 202(2)  (early dissolution),
• any notice given under section 205(1)(b) IA (notice from the official receiver that the liquidation is complete), 
•  any other matter the OR considers may be relevant to Registrar. 

The flats will remain the property of the unit holders and will not feature on the company's statement of affairs unless the commonhold association itself should own one (or more) in its own right. 

If no succession order is made the common parts would remain as assets in the liquidation and should be disposed of if a willing buyer can be found.

59.53 Common Ownership Enterprises

A common ownership enterprise is a body, either a company limited by guarantee (see paragraph 59.57), a co-operative society or an industrial and provident society (see paragraphs 59.19 to 59.24), to which the FSA has given a certificate to the effect that it is an common ownership enterprise [note 54]. Only persons who are employed by the body, or any of its subsidiaries, are permitted to be members of the body. The body must be controlled by a majority of the people working for it. The assets must be applied only for the purposes of the objects of the body. 

On the winding up of a common ownership enterprise any assets remaining after the liabilities are satisfied are not distributed among its members but must be transferred to another common ownership body or a central fund maintained for the benefit of common ownership enterprises as the members may determine.

59.54 Community Interest Companies

Since 1 June 2005 Community Interest Companies (CIC) can be established under the provisions of the Companies (Audit, Investigations and Community Enterprise) Act 2004 and the Community Interest Company Regulations 2005, and are designed for use by not-for-profit social enterprises. Subject to the specific requirements of the 2004 Act and Regulations, the whole of existing company law and practice is applicable to CICs. A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than giving returns to shareholders. Social enterprises are active in a wide range of markets such as social housing, waste recycling, fair trade, local transport, the provision of childcare and care services to the elderly etc. 

To ensure that CICs use their assets and profits for the community interest, CICs have some special features and their own independent Regulator [note 55] (based at Companies House, Cardiff) www.cicregulator.gov.uk  (see also Annex A).

To register as a CIC a company must adopt a suitable constitution (established in its Memorandum and Articles of Association) and satisfy (in the opinion of the Regulator) a community interest test, confirming that it will pursue purposes beneficial to the community and will not serve an unduly restricted group of beneficiaries [note 56]. 

A company may incorporate as a CIC and existing companies, including charities, can convert to CIC status provided they meet the necessary requirements. A CIC can be a private company limited by shares, private company limited by guarantee (see paragraph 59.57) or public limited company [note 57]. 

A CIC must have a name ending with one of the following designations:

•  for public companies - 'Community Interest Public Limited Company' or 'Community Interest PLC',
• for other companies - ‘Community Interest Company' or 'c.i.c' [note 58]

CICs are restricted from distributing profits and assets to their members. The purpose of this “asset lock” is to ensure that the assets and profits of a CIC are either permanently retained within the CIC and used solely for the community purposes for which it was formed, or transferred to another asset-locked organisation e.g. another CIC or a charity. In order to raise investment, CICs limited by shares will have the option of issuing shares that pay a dividend to investors but the dividend payable on these shares will be subject to a cap [note 59].

A CIC must produce an annual “community interest report” to be delivered with its accounts to Companies House and placed on the public record [note 60].

The Regulator is responsible for ensuring that CICs comply with their legal requirements and he/she has various powers, for example to investigate (or appoint someone else to investigate) the affairs of a CIC and he/she may by order remove (or suspend for up to one year pending a decision whether to remove) a director of a CIC. A person who has been removed may not subsequently be appointed a director of the company. 

The Regulator may also by order appoint a manager in respect of the property and affairs of a CIC and the order will specify the manager’s functions and powers. Where a manager is appointed, the powers of the company’s directors may be restricted [note 61]. 

In addition to the Regulator, there is an officer known as the Official Property Holder, who is one of the Regulator’s staff [note 62]. The Official Property Holder’s role is to hold property where the Regulator has made an order vesting that property in the Official Property Holder, so as to safeguard it for the community interest. The Official Property Holder will hold property as a trustee and will hold the property vested in him/her on trust for its rightful owner. The Official Property Holder may release or deal with property that he/she holds so as to give effect to the rights of third parties in that property, or to comply with a request made by the office-holder, including a liquidator, where a CIC is insolvent. Otherwise the Official Property Holder may only release or deal with the property in accordance with the directions of the Regulator.

To complete the set up there is an Appeals Officer who has the power to determine appeals against decisions and orders of the Regulator [note 64].

59.55 The difference between a CIC and a charity

An enterprise cannot be both a CIC and a charity (see paragraph 59.45).  A charity may convert to a CIC as long as meets CIC requirements. and has the permission of the Charities Commission. CICs and charities are different types of legal entity. Charities must be established exclusively for charitable purposes whereas CICs can be established for any lawful purpose, as long as their activities are carried out for the benefit of the community. CICs will be more lightly regulated than charities but do not have the same advantages (e.g. tax benefits) of charitable status.

A charity may establish a CIC as a subsidiary, in which case the CIC would be permitted to pass assets to the charity, e.g. a CIC could run a “charity shop” and pass the profits to the charity which owns it. 

59.56 Winding up a CIC

A CIC may be subject to all the standard insolvency procedures with some minor amendments. The winding up of a CIC will in practice be very similar to the winding up of any other company and official receivers should therefore proceed with a liquidation in much the same way as normal.

 The main differences to note are that: - 

• In addition to those who may present a petition to the court for the winding up of a company [note 64], the Regulator will be able to present a petition for the winding up of a CIC [note 65]
• A copy of the winding-up order should still be sent to the Registrar of Companies and the Registrar is required to provide the Regulator with a copy of that order [note 66]. 
• If a manager has been appointed (see paragraph 59.54), the Regulator must discharge that order on the appointment of a provisional liquidator or liquidator (the same applies if an administrative receiver or administrator is appointed) [note 67]. 
• Office-holders in an insolvency, including a liquidator, may request that the Official Property Holder (see paragraph 59.54) release or deal with property that he/she holds [note 68].
• The Regulations impose restrictions on the distribution of a CICs assets on winding up, so that the Regulator can ensure that such assets are preserved for the community benefit. However, the restrictions only apply to any assets which remain after the company’s liabilities to creditors have been paid [note 69]. 
• Where a CIC is wound up and some property of the company (the “residual assets”) remains after satisfaction of the company’s liabilities, then the residual assets should be distributed to those members of the CIC (if any) who are entitled to share in any distribution of assets on the winding up of the company according to their rights and interests in the company. A member cannot receive an amount which exceeds the paid up value of the shares that he/she holds [note 70].

In the unlikely situation that residual assets remain after any distribution to members, then these must be distributed as follows [note 71]: - 

• Where the memorandum or articles of a CIC specify an asset-locked body (e.g. another CIC) to which any remaining residual assets shall be distributed, then they must be distributed to that body in such proportions or amounts as the Regulator directs. 
• If no such body is nominated in the memorandum/articles, the Regulator is aware that the nominated body is being wound up, or the Regulator receives representations from a member/director of the CIC that the nominated body is not a suitable recipient and agrees with those representations, then any residual assets must be distributed as directed by the Regulator.

The Regulator is required to give notice of any direction to the CIC and the liquidator [note 72].

59.57 Companies limited by guarantee

Companies limited by guarantee are mostly formed for charitable, social or non trading purposes. A company limited by guarantee is one whose memorandum contains an undertaking by its members to contribute a specified amount toward the payment of the company's debts and liabilities and the expenses of its winding up if it is wound up while he/she is a member or within one year after he/she ceases to be a member [note 73]. The specified amount may vary for different members and may be calculated by reference to facts which can only be ascertained when the company is wound up. The rest of the company's memorandum is similar to that of a company limited by shares and it states that the liability of its members is limited.

The guarantee given by members of a company limited by guarantee is different from the liability of shareholders for unpaid share capital in that it is not an asset of the company, but a contingent liability of the members to contribute the amount guaranteed if the company is wound up. In the first instance it is the persons who are members at the commencement of the winding up who are responsible for honouring the guarantee [note 74]. Persons who have been members within a year before the commencement of the winding up may also be compelled to contribute if the present members are unable to do so, or if the company's debts exceed the contributions which the present members are required to make [note 75]. Past members are liable to contribute only toward payment of the company's debts incurred before they ceased to be a member [note 76]. No member can be required to make a contribution exceeding the amount undertaken to be contributed by him/her [note 77]. If contributions are required from members, the official receiver should follow the procedure detailed in paragraphs Chapter 58 - Unregistered companies, paragraphs 58.16 to 58.20 relating to making calls on contributories.

59.58 Dentists  

All dentists, must be registered with the General Dental Council (see Annex A) Dentists may also be a member of the British Dental Association, the trade association of dentistry.  A dentist will only be suspended from practice following the making of a bankruptcy order if the bankruptcy reveals evidence of some related professional misconduct. 

Most dentists are self-employed (see paragraphs 59.59 –59.61). Dentists may also be a salaried employee of a dental practice or hospital. Dentists often work in partnerships and the terms of any partnership agreement should be ascertained. Unless the partnership is also subject to a winding up order or bankruptcy orders are made against all the partners the official receiver cannot deal with the partnership business (see Chapter 53, Partnerships, Part 3).

The majority of dentists do a mix of NHS and private dental work and may consequently have several different terms of employment, and sources of income. 

Where a dentist is carrying out a mix of work the official receiver should follow the guidance provided in paragraphs 59.58 –59.67

59.59 National Health Service (NHS) – Self employed Dentists 

A self employed NHS dentist enters into a contract with the local Primary Care Trust (PCT) in England or Local Health Board (LHB) in Wales to deliver dental services (see paragraph 59.60). The contract is negotiated locally between the dentist and the PCT/LHB. The NHS dentist receives an annual fee from the PCT/LHB and charges standard fees to patients according to treatment received. The annual fee and the work to be done will be part of the negotiation between the dentist and the PCT/LHB.

Self employed NHS dentists fund their own practice, equipment and staff and personal income is the residual from the contract after expenses have been met.

The NHS Business Services Authority (NHSBSA) was set up in 2006 to pay and monitor providers of NHS dental services under the terms of their contract. NHS dentists are required to send to the NHSBSA Dental Practice Division a claim for each course of treatment provided. The claim includes an indication of the amount of money collected from the patient for the course of treatment and an indication of the number of units of activity appropriate to the course of treatment [note 78]. The NHSBSA is responsible for paying NHS dentists monthly and the amount paid is usually their monthly fee allocation based on the annual contract value, less any patient charges collected and reported in claims submitted.

If a bankruptcy order is made against a NHS dentist the Chief Executive of the PCT/LHB should be informed (see also paragraph 4.69). An undischarged bankrupt or person subject to a BRO or BRU may not enter into a contract for general dental care with a PCT [note 79] and where a bankruptcy order is made or the dentist is subject of a BRO or BRU the PCT/LHB may terminate any ongoing contract but this decision is not automatic and the PCT/LHB will consider circumstances on a case by case basis. [note 80].  

59.60 Primary Care Trusts and Local Health Boards

PCT’s were set up under the Health Care Act 1999 and they are free standing, legally established National Health bodies that are accountable to their Health Authorities. PCT’s are responsible for securing provision of a full range of medical, dental, pharmaceutical and optical service for local populations in England. All NHS doctors and dentists in England are employed either directly or by contract to a PCT.

LHBs are similar to PCT’s and are free standing statutory bodies accountable to the Minister for Health and Social Services and the Welsh Assembly Government. LHBs receive a substantial share of the NHS budget for Wales, and as such are involved in planning and allocating heath services tailored to their own local population, and then negotiating with hospital trusts, General Practitioner (GP) practices, dentists and other organisations to provide these services. All NHS doctors and dentists in Wales are employed either directly or by contract to a LHB.

59.61 NHS Dentists and money due from/owed by NHSBSA Dental Practice Division

Where a bankruptcy order is made against a self employed NHS dentist the official receiver should write to the NHSBSA Dental Practice Division (see Annex A) to establish whether any money is owed to them by the dentist or if any money is due to the insolvent estate. The NHSBSA Dental Practice Division may owe money to the bankrupt if he/she has been underpaid, if money has been withheld on the instruction of the PCT/LHB or if money is held pending probate in the case of a deceased dentist or where there is a dispute within a practice or the bankrupt has been suspended as a dentist.

Alternatively the bankrupt may owe money to the NHSBSA where he/she has under delivered on the performance as detailed in the terms of contract and the payment has been made or there has been a retrospective amendment to the terms of the contract. There is a significant time delay between payments being made to dentists and activity reports being made available and significant debts can accrue. Additionally the value of patient charges in a month may exceed the dentist’s monthly allocation resulting in money due from the bankrupt.

59.62 Dentists in private practice

In a private dental practice the dentist’s terms of employment will be agreed between the patient and the dentist with no involvement of the PCT/LHB. The private dental industry is an open market with customers choosing which dentist to employ.

To spread the cost of dental treatment many private patients have dental plans with companies that collect monthly payments from the patient on behalf of the dentist who will carry out the contracted work. These contracts are not transferable to another dentist when the dentist ceases to practice and the contract will end and may give rise to either a book debt or creditors claim depending on the terms of the contract and what payments have been made to the dentist. Any dental plan provider should be informed of the bankruptcy of the dentist as a matter of urgency.

The business and accounting records of a private dental practice should be recovered in the usual way (See chapter 10). The accounting records of the dentist should be examined to establish amounts due by patients and the book debt contractor should be instructed to deal with the collection of any outstanding fees (see paragraphs 31.1.4 to 31.1.33).  For information on how to deal with patient dental records (see paragraph 59.65).

59.63 Dealing with a patient in the middle of the course

Where a patient is in the middle of a course of treatment with a dentist it may be possible for the bankrupt to arrange for the treatment to be carried out by another dentist. Alternatively the patient should be referred to the PCT/LHB in the case of NHS treatment or where the treatment has been undertaken privately should be advised to seek another private dentist.

59.64 Dealing with the patients (NHS and private)

Where a dentist ceases to practice it is the responsibility of the patient to find another dentist. For patients seeking NHS dental treatment most PCT's/LHBs will give assistance in enabling them to register with an NHS dentist and the official receiver should refer the patient to the PCT/LHB.  Where the official receiver has sold the database of a private dentist’s client details it is likely that the individuals concerned will have been transferred to another private dentist. 

59.65 Dealing with dental records (applicable to both NHS and private dentists)

Records of dental treatment, are records of dealings between the dentist and patient; no other third party such as the PCT are involved. The British Dental Association advise that the dental records are a record of the dentists work and therefore remain his/her property. Where the dentist’s is ceasing or has ceased to practice the official receiver should collect the dental records as part of the records of the insolvent. Dental records are not required to be passed to the patient’s new dentist as the new dentist will make his/her own record of treatment but where requested by the patient the official receiver can release the records to a new dentist. Records that are not requested by the patient will remain with the insolvent’s business records. Where the dentist has provided treatment that includes an element of NHS treatment the record of that treatment should be kept for two years [note 81]. There is no legal requirement to keep private dental records for any specific period.

59.66 Matters for particular consideration when dealing with dentists

There may be a number of matters requiring the official receiver's consideration should a bankruptcy order be made against a dentist who has recently ceased to practice. These may include: -

a) Drugs - there may be quantities of drugs including controlled drugs and prescription only medicines on the premises. For information about the disposal of drugs including controlled drugs and prescription only medicines see paragraphs 31.6.20 to 31.6.28.

b) Equipment (e.g. the dentists' chair, instruments and x-ray machines) may be considered by the dentist to be the tools of his/her trade and therefore may be claimed as exempt property (see Chapter 8 - Inspections, Part 9).  Where equipment is claimed as exempt property to enable the dentist to continue to trade the official receiver should consider obtain an income payments agreement or income payments order (IPA/IPO) (see Chapter 31.7). It may be possible for a dentist to claim expensive equipment as exempt property e.g. high value x-ray equipment. The official receiver may allow the exemption where a higher return to the estate is likely by obtaining a higher than usual monthly payment by the bankrupt under an IPA/IPO.

c) There may be X-ray equipment which contains a radioactive source. For the disposal of radioactive waste, the advice of the Health & Safety Executive (see Annex A) should be sought.

d) There may be clinical  waste which requires disposal. In most cases, the practice will already have collection arrangements, which could be utilised by the official receiver. Alternatively, a contractor registered with the Environment Agency (see Annex A) to dispose of such waste may be used.  (see paragraphs 82.10 to 82.21).

e) In the case of a dentist trading privately the database of client’s details may be an asset in the insolvency  (see paragraph 56.67 and paragraphs 31.10.123 –31.10.128)

The Department of Health operates a helpline which may be able to provide further information if required (see Annex A).

59.67 Sale of database of a dentist’s private patient details

If a private dentist ceases to trade the official receiver may be in possession of a database of details relating to the patients treated privately by the dentist. This database is potentially an asset, which could be sold for the benefit of the insolvent estate.

Normally personal information in a database should not be sold if the individuals have not been told originally that their information could be passed on to other organisations. However, where a business is insolvent, bankrupt, being closed down or sold, the DPA will not prevent the sale of a database containing the details of individual customers, providing certain requirements are met [note 82]. These requirements are detailed in paragraphs 31.10.123 –31.10.128.

The Information Commissioner has published a good practice note on the buying and selling of databases which can be accessed at

http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/buying_and_selling_customer_databases v2.pdf

59.68 Doctors

All doctors in practice in the UK (including private doctors) are required to be registered with the General Medical Council (see Annex A). There are separate registers for General Practitioners and consultants. A list of all registered medical practitioners is maintained on the General Medical Council website at www.gmc-uk.org and can be accessed via a searchable online database on that site. A bankruptcy order made against a doctor does not preclude him/her from continuing to trade as a doctor. A doctor will only be suspended from practice by the General Medical Council where the bankruptcy reveals evidence of some related professional misconduct. 

59.69 NHS Doctors

A doctor in an NHS practice is employed by the local PCT/LHB (see paragraph 59.60). If a bankruptcy order is made, the Chief Executive of the local PCT/LHB should be informed as soon as possible (see also paragraph 4.70) as an individual becoming the subject of a bankruptcy order provides the PCT/LHB with the power to terminate a contract of employment with an individual. Such termination is not automatic and the PCT/LHB will consider the circumstances on a case-by-case basis. 

59.70 Cessation of trading

Where a NHS doctor trades as a GP in a partnership with others and ceases to trade it is the normal practice that the remaining partners in the practice take over responsibility for his/her patient's care. In the event that the GP is practising alone the PCT will normally decide whether to 'disperse' the list of patients elsewhere in the PCT's area or whether to advertise for another GP or practise to take on the patients.

All patient records of a NHS doctor belong to the Secretary of State for Health and should a NHS doctor who is in sole practice cease to trade following the making of a bankruptcy order all patient records will be transferred to the local PCT Family Health Care department. The PCT will forward the patients' records to the patient’s new doctor.

59.71 Private doctors

In private practice a doctor’s terms of employment will be agreed between the patient and doctor with no involvement of the PCT/LHB. The private medical industry is an open market with customers choosing which doctor to employ.

59.72 Private patient records

The primary purpose of making and maintaining health records is the provision of health care to the patient. Private doctors are considered to own the records they make of patient treatment and any records that can identify a patient are confidential between the doctor and the patient and should not be perused by the official receiver. This confidentiality can only be waived with the consent of the patient or where the disclosure of the information is in the overwhelming public interest.

Private doctors are recommended by the British Medical Association (see Annex A) to retain the record of medical for the periods recommended by the Department of Health for NHS doctors although there is no legislative requirement to keep those records. The Department of Health give detailed advice about the storage and retention of NHS records [note 85] which must be retained for a minimum of 10 years.

Patients have the right to access their medical records [note 84] and the records may be required for litigation purposes at any time in the future.

Where a private doctor ceases to practice the patient’s medical records should be forwarded to the doctor who is taking over the care of the patient or where there is no succeeding doctor returned to the patient. The storage of such medical records by the official receiver for the recommended periods would be an onerous task and should be avoided where possible.

59.73 Outstanding fees

The accounting records of the doctor should be examined to establish amounts due by patients and the book debt contractor should be instructed to deal with the collection of any outstanding fees (see chapter 31.1 paragraphs 31.1.4 to 31.1.33). ) The official receiver may encounter difficulties where the bankrupt’s accounting records are incomplete and the amounts due for work undertaken by the doctor are not known. Due to patient confidentiality the official receiver should not peruse any records in relation to a patient, without the patient’s consent, other than to establish whether it contains a time costs sheet to assist in the calculation of outstanding fees. When the bill for outstanding fees has been settled the file can then be returned to the patient or sent on to another doctor at the patient’s request.

59.74 Matters for particular consideration when dealing with doctors

There may be a number of matters requiring the official receiver's consideration should a bankruptcy order be made against a doctor who has recently ceased to practice. These may include: -

a) Drugs - there may be quantities of drugs including controlled drugs and prescription only medicines on the premises. For information about the disposal of drugs including controlled drugs and prescription only medicines see paragraphs 31.6.20 to 31.6.28.

b) Medical equipment may be considered by the doctor to be the tools of his/her trade and therefore exempt property see Chapter 8 - Inspections, Part 9. ).  Where equipment is claimed as exempt property to enable the doctor to continue to trade the official receiver should consider obtaining an income payments agreement or income payments order (IPA/IPO) (see Chapter 31.7). It may be possible for a doctor to claim expensive equipment as exempt property e.g. high value x-ray equipment. The official receiver should consider allowing the exemption as higher return to the estate may be possible by obtaining a higher monthly payment by the bankrupt under an IPA/IPO.

c) There may be X-ray equipment which contains a radioactive source. For the disposal of radioactive waste, the advice of the Health & Safety Executive should be sought (see Annex A)

d) There may be clinical  waste which requires disposal. In most cases, the practice will already have collection arrangements, which could be utilised by the official receiver. Alternatively, a contractor registered with the Environment Agency (see Annex A) to dispose of such waste may be used (see Chapter 82 Environmental legislation, Part 2, paragraphs 82.10 to 82.21).

e) In the case of a dentist trading privately the database of client’s details may be an asset in the insolvency  (see paragraph 56.67 and paragraphs 31.10.123 –31.10.128).

The Department of Health operates a helpline (see Annex A) which may be able to provide further information if required.

59.75 Football Clubs

The majority of professional football clubs are operated as limited companies and may be wound up. The principal assets of a football club would appear to be the ground and its players. The ground is often owned by a third party and either leased or rented to the club, or is subject to a mortgage. In the event of insolvency, the value of players is forfeit to the Football League and they can move on a free transfer to other clubs.

59.76 Housing Associations

A registered social landlord is a housing association or similar non-profit making body that is registered with the Housing Corporation (see Annex A). The Housing Corporation is the government agency that funds new affordable housing and regulates housing associations in England.  A housing association will be concerned with the supply of low cost rented accommodation and is likely to receive a high level of investment of public funds in the form of housing stock and grants. Provisions exist within the Housing Act 1996 to protect those public funds and to continue to supply the housing should a registered social landlord encounter financial difficulties. For information relating to the winding up of a registered social landlord, see Chapter 31.3 - Freehold and leasehold property, Part 8.

59.77 Nursing and residential care homes

If an insolvency order is made against a nursing home wherever possible, the official receiver should seek the early appointment of an insolvency practitioner to act as liquidator or trustee, or where a charge exists over the company's assets that was created pre 15 September 2003 to consider approaching the charge holder to appoint an administrative receiver (see Chapter 56, Alternative Corporate Proceedings, Part 2). If the official receiver decides to close down a home, he/she should contact the local social services and/or health authority with a view to those agencies finding alternative accommodation for the residents before this occurs, wherever possible. Wherever possible this should be completed promptly but care should be taken not to cause unnecessary disturbance or upheaval to the residents who may be elderly or confused. No guarantees should be given as to whether the home meets the necessary fire, health and safety and medical regulations, as if the home does not meet such regulations the local health authority must ensure its closure.

59.78 Post offices 

The official receiver is most likely to become involved if a bankruptcy order is made against a sub post master/mistress (see paragraph 59.79) or where a post office shares premises with a business that goes into liquidation/bankruptcy (see paragraph 59.80). 

59.79 Bankruptcy of the postmaster/mistress

Sub post masters/mistresses are not employees of Post Office Limited but operate as agents under contract to provide a service. 

Bankruptcy, in itself does not prevent a sub postmaster/mistress from continuing to provide that service, although he/she has to provide premises, and if the shop premises in which the sub post office is located is to be closed down he/she would be unable to continue using those premises. If the postmaster/mistress lives at the premises, he/she must be able to have access to his/her living accommodation, but wherever possible the business premises must be secured.

If a bankruptcy order is made against a sub postmaster/mistress, Post Office Limited Audit Section should be contacted. Where possible the sub postmaster/mistress should be asked for the name and telephone number of their contact within the Post Office as this will save time tracing the relevant manager but if this is not possible the Post Office Audit Section should be contacted by Fax on 0161 886 6129 giving the name and address of the bankrupt and the business address.  The Post Office operates a Help Line (Tel: 0345 223344) which may be able to assist in obtaining a contact at Audit Section. The Audit Section will send a representative to the sub post office to identify Post Office property and remove Post Office cash and other property. The Post Office's primary aim is likely to be the continuance of the Post Office service. In the meantime the business should be closed down and the assets secured and protected.

Where a bankruptcy order is made against the individual who is running the Post Office business there is a convention that everything "behind the grille" is the property of the Post Office, the rest being the insolvent's property. This is not necessarily correct, as a sub postmaster/mistress may also be operating another business within the same premises and keep high value items, such as cigarettes, behind the grille where they are more secure, and Post Office stationery etc., which is of little value, may be stored elsewhere. 

It is possible that the Post Office property at the premises is not insured, as many insurance companies are unwilling to provide cover, as sub post offices can be vulnerable to robbery. If the official receiver requires insurance, the official receiver should make the insurers aware that the premises contain a post office (see Chapter 49: Insurance, Part 3).

59.80 Post office sharing insolvent's premises

Where the post office share premises with an insolvent business but is not part of the insolvent business the official receiver should consider the terms of the post office's agreement to occupy the premises. If the post office has a right to occupy the premises and conduct a business this business should not be impeded. The official receiver should consider how to permit the post office to operate whilst protecting any assets belonging to the insolvent business and insuring against any public liability claim. 

59.81 Public houses

All public houses must be licensed [note 85]. A premises licence enables the premises to be used for the sale of alcohol, the provision of alcohol and the sale of hot food after 11pm. It is an offence to provide these activities without a valid premises licence. The holder of the Premises Licence can be an individual, company or partnership [note 86]. Additionally the premises must have a Designated Premises Supervisor, a natural person (an individual, not a company or partnership) who must hold a personal licence [note 87]. The Premises Licence holder and the Designated Premises Supervisor can be the same person for example a publican in a free house (see paragraph 59.82) but in tied houses (see paragraph 59.82) the premises licence holder is likely to be the brewery and the Designated Premises Supervisor the manager or tenant.

If the holder of the Premises Licence becomes insolvent the licence lapses [note 88] and the business is no longer licensed to sell alcohol. A Personal Licence is not affected by the bankruptcy of the holder but there must be a valid Premises Licence in force to enable trading as licensed premises to continue.  

59.82 Management of public houses

Public houses in Britain are generally designated as either a free house, where there is no obligation on the pub to buy beer from a particular brewery or a tied house where the pub must buy the majority of its stock from a particular brewery. 

 A tied house maybe rented from the brewery under a tenancy agreement or the brewery may appoint a salaried manager to run the pub it owns, this form of tie is sometimes called a managed house.  A tied pub may also be owned by the publican with the purchase of the pub made by loans from a brewery from which the publican is required to purchase beer in return.

A free house is a pub that is free of the control of any one particular brewery. But "free" in this context does not necessarily mean "independent". Many free houses are not independent family businesses but are owned by large pub companies. There are very few truly free houses, either because a private pub owner has had to come to a financial arrangement with a brewer or other company in order to fund the purchase of the pub, or simply because the pub is owned by one of the large pub chains.

Where an insolvency order is made against the proprietor of a public house the official receiver will need to establish the basis on which the public house trades and the extent of the involvement of a brewery.

59.83 Bankruptcy of a Designated Premises Supervisor 

Where a bankruptcy order is made against a Designated Premises Supervisor (Personal Licence holder) the holder of the Premises Licence should be informed. It is the Premises Licence holder's responsibility to either close the premises or appoint a new manager. Reference should be made to any tenancy agreement when dealing with the premises, fixtures and stock (see paragraph 31.6.48). Any property claimed by the tenant should be identified on any inventory of the contents.

59.84 Insolvency of the premises licence holder

Where a winding-up order or bankruptcy order is made against the Premises Licence holder the license lapses and precludes any further trading by the debtor in respect of licensable activities at those premises and the official receiver will need to consider whether the business should be continued (see Chapter 62, Carrying on a business, paragraph 62.7). Within 7 days of an insolvency order a liquidator or trustee is able to issue an "interim authority notice" in respect of a lapsed premises licence until the licensed premises can be transferred to a third party [note 89]. This involves the liquidator or trustee in taking on the responsibility for the premises licence on a temporary basis and enable trading to continue until the licence is transferred to a third party. The official receiver may therefore wish to consider the desirability of an urgent application for a Secretary of State insolvency practitioner appointment where it is considered appropriate for the licensed activities to continue (see Chapter 17, Appointment of liquidators and trustees, Part 5).

Further information is available from the Department of Culture, Media and Sport website at  http:www.culture.gov.uk/alcohol_and_entertainment/licensing_act_2003/     

59.85 Cessation of trading

If the public house is to be closed, the official receiver will need to establish ownership of the fixtures and fittings as charges may exist over the assets. Similarly, stocks (including alcohol) may have been supplied on a sale or return basis. Some agents may sell opened bottles of spirits, but partly used casks of beer are considered to be of no value. If there is food at the premises the official receiver should consider the Food Safety Act 1990 provisions as a person who sells or offers for human consumption food which fails to comply with food safety requirements is guilty of an offence, Guidance on dealing with food is given in paragraphs 31.6.38 and 31.6.39. Gaming machines and juke boxes are likely to be supplied by a third party and arrangements should be made for their prompt collection; the insolvent may be entitled to a share of the takings of such machines so the rental agreements should be examined. Any keys to the cash boxes of such machines should be recovered. There is always a safe in a public house, which should be located, and the contents dealt with. If the landlord lives at the premises, wherever possible, steps should be taken to secure the business premises while still allowing access to the living accommodation.

59.86 Schools

A winding-up order may be made against an independent school.  Information about the independent schools sector can be obtained from the Independent Schools Council (telephone: 0207 766 7070, website: http://www.isc.co.uk/), though this organisation is unable to provide any direct or practical assistance to official receivers should there be a need to close down a school.    

Where the official receiver is required to inspect or close down a school he/she should be aware that there are strict rules governing working with children. The official receiver should not be denied access to the school on the grounds that they have not had the relevant Criminal Records Bureau checks, that is that they had not been verified as being fit to work with children by the Criminal Records Bureau, as staff will not be required to work directly or alone with the children. To avoid any difficulties the official receiver should ensure that a member of the school staff accompanies them at all times when in the school premises during school hours. The Children's Safeguards Policy Team, in the Department for Children, Schools and Families (telephone number 01325 391151) should be contacted if any queries are raised about access to the school on child protection grounds.

It is likely that school staff can be persuaded to remain with the children in the company of the official receiver’s staff until such time as the children can be returned to the custody of parents or guardians.  That way, in addition to avoiding the need for official receiver’s staff to have sole custody of the children, the return of children can be overseen by school staff to ensure that children are safely reunited with the correct adult.   Consideration should be given by the official receiver for an early return of the children to the care of the parents or guardians by arranging for school staff to telephone parents or guardians and ask them to attend at the school premises to collect their children as soon as possible. This may not be practical depending on the number of children in the school and as it may not be possible to contact all parents/guardians during the course of the day and, therefore, it may be necessary for the school to continue until the end of the school day.

In the unlikely event that school staff choose not to remain at the premises then the official receiver should immediately contact the child protection team of the local authority (at county or unitary authority level) and arrange for them to attend at the school premises as soon a possible, as the children would be in a position of increased risk to their welfare.  In this respect, it would be prudent for the official receiver to make a call to the relevant child protection team in advance of attending at the school premises to put them on notice that their assistance may be required and give them the opportunity to accompany the official receiver’s staff at the premises in any case. 

The responsibility for arranging alternative schooling/education for the children rests with the parents/guardians of the children and, therefore, this is something that need not concern the official receiver directly.  The official receiver should consider issuing a letter to all parents and guardians (perhaps when they collect their child) outlining the effect of the winding-up order on the future of the school and pointing them in the direction of the education department of the local authority who can provide advice on the availability of school places in the local area.

Outstanding fees should be dealt with as an asset in the insolvency (where fees are in arrears), or as a debt where fees have been paid in advance. 

59.87 Solicitors

All practising solicitors in England and Wales must be members of the Law Society which is the representative body for solicitors formed to set standards and ensure good practice. (see Annex A). The court must give notice to the Secretary of the Law Society if a bankruptcy order is made against a solicitor [note 90]. On the making of a bankruptcy order against a solicitor the official receiver should also notify the Law Society and the Solicitors Regulation Authority (see Annex A) (see also paragraph 4.61). ). If a bankruptcy order is made against a person who is a solicitor, their practising certificate is immediately suspended  [note 91].

59.88 The Solicitor’s Regulation Authority

The regulation of solicitors and their practice is dealt with by the Solicitors Regulation Authority, which was set up in January 2007 to replace the Law Society Regulation Board. It is important that the Resolutions Team of the Solicitors Regulation Authority is informed, in writing, of any bankruptcy promptly as it may wish to intervene in the solicitor’s practice (see 59.89) A solicitor may apply to the Solicitors Regulation Authority to have the suspension of his/her practising licence terminated and may apply in advance of a bankruptcy hearing if the making of a bankruptcy order seems probable. Conditions (such as operating as a partner or in employment approved by the Solicitors Regulation Authority) are usually imposed if a bankrupt solicitor's practising certificate is reinstated. Similar conditions are likely to be imposed on an individual on his/her discharge from bankruptcy.

The Solicitors Regulation Authority obviously has the experience and resources to best deal with a solicitor’s practice. In all cases the official receiver should press strongly for the appointment of an intervenor, and only deal with the practice himself/herself as a last resort. Where no intervention is made and the solicitor still has cases in progress the official receiver may consider an urgent appointment of a trustee with experience of legal practice be sought (see Chapter 17 Appointment of liquidators and trustees).

59.89 Intervention by the Solicitor’s Regulation Authority

The Solicitors Regulation Authority has the power to intervene in a solicitors practice on a number of grounds [note 92]. One of the grounds for intervention is the making of a bankruptcy order and the suspension of the solicitors practicing certificate.  Intervention is primarily designed to secure client money and client files in the public interest for the protection of the clients of the particular firm in relation to which intervention takes place. It is not primarily concerned to determine the basis on which the solicitor affected by the intervention should thereafter be entitled to practice.

Intervention has the effect of vesting in the Solicitors Regulation Authority all practice money. The Solicitors Regulation Authority also takes possession of the practice papers, including all client files and documents, all accounting records and financial information, and all money in all client and office accounts. The Solicitors Regulation Authority will then appoint a local solicitor to act as its Intervention Agent.

The Intervention Agent's role is not to continue the practice beyond dealing with urgent matters; the Agent will wind down the practice passing client papers on in accordance with the client's instructions. The Agent will also carry out a reconciliation and verification of the accounts of the practice and will distribute any money held to those beneficially entitled to it.

Subject to any order for the payment of costs made on an application to court any costs incurred by the Solicitors Regulation Authority in connection with the intervention are to be paid by the solicitor and are recoverable as a debt owing to the Solicitors Regulation Authority [note 93].  If intervention had occurred prior to the date of the bankruptcy order then the costs of intervention are a bankruptcy debt. If intervention occurs after the date of the bankruptcy order then the costs of intervention are a post bankruptcy debt for which the bankrupt is personally liable, unless the court orders otherwise [note 93].  

59.90 Collection of debts

After intervention takes place in a solicitor’s practice, The Solicitors Regulation Authority is entitled to receive monies held by the practice at that time but it is not entitled to collect outstanding money which remains vested in the solicitor. In the event of a bankruptcy order being made against the solicitor, outstanding fees will therefore vest in the official receiver as trustee.  If the official receiver collects the fees in respect of outstanding legal debts they vest in the bankruptcy estate but as soon as they are collected they then vest in the Solicitors Regulation Authority until the full costs of the intervention are met (where after the surplus belongs to the insolvent)  [note 94].

The official receiver could collect the outstanding practice debts but it may be that this is not to the advantage of the insolvent estate if the outstanding practice debts are less than the costs of the intervention. If there is no prospect of a surplus after the intervention costs have been paid then the bankruptcy estate has no financial interest in the collection of the practice debts. The Solicitors Regulation Authority will want the debts collected as the deficit in the intervention can then be minimised but has no power to collect the debts. In such circumstances the official receiver could consider:

• Appointing the Intervention solicitors as practice debt collectors for the official receiver, as trustee, on the basis that all costs in doing so will be costs in the intervention and will not fall on the official receiver or the bankruptcy estate.
• Entering into an assignment of the outstanding practice debts to the Law Society. 

59.91 Solicitor’s files

It is a fundamental duty of a solicitor to keep all clients affairs confidential. The duty of confidentiality extends to all confidential information about a client’s affairs irrespective of the source of information. The official receiver should not read a bankrupt solicitor’s files as this would breach the duty of confidentiality to the client. The official receiver should consider at all times that the solicitor’s client files are confidential and should be kept securely.

59.92 Client files containing work completed by the solicitor

Where a file contains work undertaken by the solicitor as instructed by the client that has been completed and the final bill has been settled in full by the client the official receiver should take steps to contact the client to arrange collection of the file.

59.93 Client files containing work in progress

Where a file contains work in progress by the solicitor the official receiver needs to balance the need to return client files whilst seeking to preserve the estate by demanding settlement of overdue accounts. The file should remain with the official receiver as trustee until such time as any outstanding bill in respect of the work undertaken by the solicitor has been paid.

The accounting records of the solicitor should be examined to establish amounts due by clients and the book debt contractor should be instructed to deal with the collection of any outstanding fees (see paragraphs 31.1.4 to 31.1.33). ) The official receiver may encounter difficulties where the bankrupt’s accounting records are incomplete and the amounts due for work undertaken by the solicitor are not known. Due to client confidentiality the official receiver should not peruse the file, without the clients consent, other than to establish whether it contains a time costs sheet to assist in the calculation of outstanding fees. When the bill for outstanding fees has been settled the file can then be returned to the client or sent on to another solicitor at the client’s request to complete the work.

59.94 Solicitor retained on a no win no fee basis.

Where a client has instructed the solicitor on a no win no fee basis the file should be returned to the client or sent on to another solicitor on the client’s request.

59.95 Scrap metal dealers

A person may only carry on business as a scrap metal dealer if registered with the local authority in the area where the scrap metal store operates  (see paragraph 59.97) or if he/she has no such store in the area where he/she normally resides [note 95].

A person carries on business as a scrap metal dealer if he/she carries on a business which consists wholly or partly of buying and selling scrap metal, whether scrap metal sold is in the form in which it was brought or otherwise, other than a business in the course of which scrap metal is not bought except as materials or as surplus materials bought but not required for such manufacture.

59.96 What is scrap metal

Scrap metal includes any old metal, and any broken, worn out, defaced or partly manufactured articles made wholly or partly of metal and any metallic wastes, and also includes old, broken, worn out or defaced tool tips or dies made of any of the materials commonly known as hard metals or of cemented or sintered metallic carbides.

59.97 Scrap metal store

A scrap metal store is a place where scrap metal is received or kept in the course of business of a scrap metal dealer.

59.98 Scrap metal dealers records

A scrap metal dealer must keep a book at each place occupied by him/her as a scrap metal store in which should be entered details of all scrap metal received at that place, and all scrap metal processed or dispatched from that place [note 96]. This record must include:

For scrap metal received:

• the description and weight of the scrap metal.
• the date and time of the receipt of the scrap metal.
• If the scrap metal is received from another person the full name and address of that person.
• the price, if any, payable in respect of the receipt of the scrap metal if that price has been ascertained at the time when the written record is to be made.
• If the above is not applicable, the value of the scrap metal as estimated by the dealer.
• The registration number of any vehicles delivering scrap.

For scrap dispatched:

• the description and weight of the scrap metal.
• the date and type of processing or the date of dispatch.
• the full name and address of the person the scrap metal has been dispatched to and the value of the transaction.
• if the scrap metal has been dispatched without sale or exchange, the value of the scrap metal as estimated by the dealer.

This book must be retained for two years beginning on the day the last entry was made. A scrap metal dealer, if he/she has complied with the law, should therefore have a detailed record to provide to the official receiver of at least current stock. The official receiver should also ensure that any records collected from a scrap metal dealer are not destroyed until at least two years after the date of the insolvency order.