1. Certain modernisation initiatives under the project are being pursued which would require a Legislative Reform Order (LRO) amendment to address changes to the Insolvency Act were they to proceed. The proposals include removal of Insolvency Rules references to advertising by “newspaper” to allow office-holders broader discretion on how to best publicise insolvency events, in addition to the requirement to Gazette. Also whether the Insolvency Rules might be amended to allow office-holders sending notice of their appointment, other than the Official Receiver (who has a separate investigatory role), to include a request for creditors to notify the office-holder if they wish to OPT IN to receive further notices in that case (except for notice of proposed dividend which would remain mandatory). The Service will issue a public consultation document in the coming months for the purpose of taking views from interested parties on the LRO proposals.

2. It has become clear in recent weeks that with the formal consultation and subsequent work that needs to be undertaken to make our LRO changes to the Insolvency Act, a commencement date of April 2008 for the Insolvency Rules 2008 is no longer realistic. Accordingly, the Minister has confirmed his agreement to putting back the date for commencement of the Insolvency Rules 2008 to the next Common Commencement Date of 1 October 2008.  It is proposed that certain of the smaller statutory instruments being consolidated under the project will still be commenced in April 2008.

3. Our current proposal is that The Insolvency Rules 2008 will be structured as follows:

4. The Common Parts contain common insolvency procedures wherein some revisions were possible to achieve greater consistency between procedures. The Common Parts, with the exception of the “Proxies and Company Representation” and “Court Rules in Proceedings Under the Act or the Rules” Parts, exclude CVA and IVA provisions where we have found a lack of commonality, both with the other insolvency procedures and between the voluntary arrangement procedures themselves.  At the suggestion of 2^nd round consultees we now propose to include within the Claims and Distributions to Creditors Common Part provisions relating to claims of Secured Creditors.

5. The Insolvency Service Policy Unit have now completed a 2nd consultation exercise where draft Parts of The Insolvency Rules 2008 were circulated to targeted consultees for detailed review and comment. This further consultation has generated more than 500 suggestions for amendment to detailed provisions within the Insolvency Rules 2008. All suggestions have been assessed and Policy Unit has issued instructions to drafting lawyers to make agreed revisions.  

6. As a result of these comments, the Schedule 6 Scale currently used to determine remuneration in liquidation and bankruptcy cases where there is neither a determination by the liquidation/creditors’ committee nor a resolution of creditors will now be retained in bankruptcy and windings-up by the court.  Other changes to the drafts include a simplification of the deadline for fixing the base of the remuneration, an alignment of the deadline for submitting proofs/proxies prior to a meeting of creditors (and for that deadline to be set in the notice of the meeting) and for proofs of debt to be prescribed in all procedures (other than voluntary arrangements).

7. In addition to our close involvement with targeted consultee groups, we have liaised with other interested parties including Companies House who are taking forward implementation of the Companies Act 2006 provisions and wish to be kept informed of developments affecting filings with the Registrar and insolvency forms. Liaison with The Ministry of Justice and The Insolvency Court Users Committee has been effective in reviewing provisions relating to court procedure and practice and our proposals to remove some requirements to file documents at court. Proposals to remove existing court filing requirements include: the removal of filings at court of company Statements of Affairs in Administration and Court winding up proceedings, the removal of the filing of disclaimers in court winding up, the removal of the requirement to file at court Gazette Notices and Advertisements (with the exception of the Winding up petition Gazette Notice) in all insolvency proceedings, the removal of the requirements for the Official Receiver to file at court copies of  his reports to creditors and accounts and further information furnished to him in bankruptcy & winding up proceedings and the removal of requirements to file at court certificates of appointment of Liquidators and Trustees.  

8. Work on the preparation of the other project statutory instruments continues.  As part of the preparation of the new Disqualification Rules to merge and replace the existing The Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules and The Insolvent Companies (Reports on Conduct of Directors) Rules, we are reviewing the form and content of the Disqualification report and return forms D1 and D2. Following consultation on  The Insolvency Proceedings (Monetary Limits) Order fees it is proposed to increase the level of the minimum debt required to support a creditors bankruptcy or winding up petition from £750 (the level fixed since 1986) to £1,500 and this change, if it were to go ahead, would take effect in relation to petitions presented from October 2008. Targeted consultation on both the draft Insolvent Partnerships Order 2008 and the draft Administration of Insolvent Estates of Deceased Persons Order 2008 are now expected to take place in late 2007.  

Any enquiries regarding the above should be directed towards Neil Ogilvie, Policy Unit, Area 5.7, 21 Bloomsbury Street, London WC1B 3QW; e-mail Neil.Ogilvie@insolvency.gsi.gov.uk