Proposals to simplify and reorder existing insolvency rules and replace them with a single set of rules fit for the 21st century were announced in a consultation document published by the Insolvency Service in September.
The new rules bring together 24 statutory instruments. They also make common provision for processes, such as meetings of creditors that apply across different insolvency procedures, to make it easier for users.
The new rules will also include written information requirements to make it easier to use electronic submission rather than relying on statutory forms. This should result in a more logical structure to improve clarity and consistency.
The consultation – modernisation of rules relating to insolvency law – which closes on 24 January 2014, is aimed at insolvency practitioners, judges, lawyers and people involved in insolvency issues, e.g. creditors and debtors. It follows feedback from users who asked for a more streamlined structure free of archaic and often impenetrable language.
The current rules have been in force since 1986 and provide a framework for the Insolvency Act 1986, setting out requirements for the majority of insolvency procedures. The draft rules anticipate some of the policy changes from the government-wide Red Tape Challenge proposals announced in July 2013 which included proposals to change the need for creditor meetings and contact.
The proposals include:
- Creating a single set of rules • Reordering the rules on more logical and clearer lines
- Using plain English and improving consistency to make the rules easier to understand, and to improve consistency across insolvency procedures
- Making it easier for documents to be delivered by electronic means
- Removing shareholders and those under a duty to contribute to unpaid share capital – contributories – from the list of people who can be appointed to a liquidation committee
At Palmers Solicitors we can advise on all aspects of insolvency, including any changes in regulations.