1. The project to review, consolidate, simplify, modernise and innovate the secondary insolvency legislation is proceeding and the consolidated secondary insolvency legislation is now planned for commencement in April 2008 (see 6 below). As well as The Insolvency Rules 1986, the project will consolidate: -

• The Insolvent Partnerships Order 1994

• The Insolvency Regulations 1994

• The Insolvency Proceedings (Fees) Order 2004

• The Insolvency Proceedings (Monetary Limits) Order 1986

• The Administration of Insolvent Estates of Deceased Persons Order 1986

• The Insolvency Practitioners and Insolvency Services Account (Fees) Order 2003

• The Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987

• The Insolvent Companies (Reports on Conduct of Directors) Rules 1996

• The Companies (Disqualification Orders) Regulations 2001 

2. Following consultation with stakeholders, and in accordance with the powers to make subordinate legislation prescribed by the primary legislation, it is anticipated that the project will achieve an outcome of 9 consolidated statutory instruments, with The Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987 and The Insolvent Companies (Reports on Conduct of Directors) Rules 1996 being merged into a single set of Rules. 

3.  The initial consultation process has proved a success. The views and suggestions of a wide range of stakeholders have been obtained by The Insolvency Service Policy Unit through extensive correspondence, internet/intranet and other articles and meetings held with stakeholders including those representing the insolvency and legal professions, and other government departments.   

4. Users of the legislation have welcomed the project initiatives and the consultation has generated an enthusiastic response. Policy Unit have currently gathered in more than 400 suggestions, from over 70 stakeholders, for amendment to the insolvency secondary legislation and prescribed forms. All have been reviewed and relevant further information has been sought. Almost half of those have been identified as actionable points to be addressed in the drafting of the consolidated Insolvency Rules and other statutory instruments. Furthermore, where valuable suggestions have been raised which extend beyond the scope of the project then these have been noted for future consideration.  

5. Certain stakeholders have requested the opportunity to participate further as the consolidation project progresses and in response it has now been agreed that a further short process of targeted consultation on the draft consolidated Insolvency Rules will be built into the project following submission of the draft Rules to the Insolvency Rules Committee. There are also plans for further targeted consultation in relation to the draft consolidated Insolvent Partnerships Order. To accommodate further participation in the project by stakeholders the commencement date for the consolidated secondary insolvency legislation listed above is now planned for April 2008. 

6. Set out below are particulars of some of the key initiatives currently being pursued under the consolidation project: - 

• Removal of obsolete provisions and duplication.

• Restructuring of the Insolvency Rules. We are considering how best to provide an index of definitions in response to user requests, and we also anticipate moving common provisions to Common Parts within the new Rules.  The existing Parts 7 to 13 are to be restructured and modernised. The Court procedure and practice provisions will largely be retained within the Insolvency Rules to meet the needs of stakeholders and by way of modernisation the new Rules will more clearly facilitate the electronic provision of information in insolvency proceedings to allow Insolvency Practitioners and Official Receivers to communicate electronically when creditors opt in.

• We propose to remove requirements for proofs and proxies to be signed and with a view to modernised insolvency practice we intend that the new Insolvency Rules will be drafted to allow Meetings of Creditors in insolvency proceedings to be held in whatever form is deemed most appropriate (i.e. electronically, physically, telephonically etc).

• Consultation has demonstrated that the majority of the existing requirements to Gazette insolvency events are considered by stakeholders to be valuable. Therefore, we intend to pursue only limited revision to the Gazetting requirements but we do propose to provide for much greater discretion for office-holders to decide when it is appropriate to advertise insolvency events in local newspapers (in addition to the requirement to Gazette).

• We are reviewing existing requirements to file insolvency documents in Court with a view to removing these from the Insolvency Rules where they no longer serve a valuable purpose. Currently, we propose to remove all requirements to file insolvency Advertisements and Gazette notices in Court with the exception of the Gazette notice of presentation of the winding up petition.

• We propose to pursue the introduction of a fixed fee option for office-holders’ remuneration to allow creditors to authorise or approve the quantum of that remuneration.

• We intend to respond to user requests for fuller write out of the Insolvent Partnerships Order and the Administration of Insolvent Estates of Deceased Persons Order provisions.

• Our lawyers have been asked to advise on the structure of the Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules and The Insolvent Companies (Report on Conduct of Directors) Rules and on the proposed merging of those 2 statutory instruments.

• We wish to pursue the removal of references to “affidavits” from the insolvency legislation to ease the cost and burden on users of the legislation. It is proposed that “affidavits” would be replaced by witness statements submitted with a statement of truth.

• We are seeking views currently on an increase in the level of debt required to support a creditor's bankruptcy and winding up petition, given that the current £750 debt figure has not been changed since 1986.

• Suggestions have been accepted for some revision to prescribed insolvency forms and we propose to make all of the new prescribed insolvency forms available on The Insolvency Service website from April 2008. The consolidation will inevitably lead to the replacement/renumbering of prescribed insolvency forms.

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.