Insolvency Service listens to Gibson Hewitt on Insolvency Rules

Business News

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We are delighted to announce that we have played an important role in amendments to new legislation that affects their industry and businesses across the UK.

Lynn Gibson, our Director, was one of only a handful of guests to be invited to a special event with the Insolvency Service in June this year.

Called InsolvencyLive!, the event was aimed at getting members of the profession to comment on the Insolvency Rules 2016, which were introduced in April 2017.

These created a number of fundamental changes to the UK’s insolvency regime, which were primarily aimed at making the process simpler by improving communications between debtors and creditors.

During the Insolvency Live event held in London, Lynn spoke with a number of the Insolvency Services key members about amendments that would improve the rules for all businesses involved in the insolvency process.

Speaking about the event, Lynn said: “I was delighted to be invited to this prestigious event, as there were very few members of my profession in attendance. Most of those who joined us were from the UK’s largest four accountancy practices, so it meant a lot to be included.

“During the event, I was able to provide a lot of useful feedback to the Insolvency Service, primarily through my expertise of acting for clients on the ground, something that many of those who attended from larger firms were unable to provide.

“Many of the things my peers and I suggested have since been included in the latest amendments, so it is nice to see that the Insolvency Service has listened.”

Following the event, the Insolvency Service has announced a number of new amendments that will come into force from 8 December 2017, entitled Insolvency (Miscellaneous Amendments) Regulations 2017.

These aim to conform the insolvency regime for LLPs to that of insolvency procedures for companies, correcting the irregularity created when the rules were originally brought into force.

The amendments also included:

  • agreement that the decision to form a creditors’ or liquidation committee may be achieved by the use of deemed consent;
  • clarification that such a committee is established at the point the officeholder sends notice of its membership to the registrar, the court or the official receiver, rather than the date the notice is delivered;
  • a new provision that aligns service requirements for a statutory demand out of the jurisdiction with provisions of the Civil Procedure Rules; and
  • a provision enabling the court to decline to file a bankruptcy petition if a creditor has not satisfied the requirement to bring the statutory demand to the debtor’s attention.

Further amendments have also been included which tidy up other points within the original legislation.

“These new amendments have really tightened up the existing rules and clarified a lot of inconsistencies that lay within the regime,” added Lynn.

“I am glad that the Insolvency Service took time to recognise the concerns of insolvency practitioners and I hope to be able to assist the department again in future.”