The Insolvency (England and Wales) Rules 2016

Publication Date:January 01, 2016
 
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2016No. 1024

INSOLVENCY, ENGLAND AND WALES

COMPANIES

INDIVIDUALS

The Insolvency (England and Wales) Rules 2016

Made18thOctober2016

Laid before Parliament25thOctober2016

Coming into force6thApril2017

The Lord Chancellor has consulted the committee existing for the purposes of section 413 of the Insolvency Act 1986( 1) (“the Act”).

The Lord Chancellor makes the following Rules in exercise of the powers conferred by sections 411 and 412( 2) of the Act, with the concurrence of the Chancellor of the High Court (by authority of the Lord Chief Justice under sections 411(7) and 412(6) of the Act) in relation to those rules which affect court procedure, and with the concurrence of the Secretary of State.

INTRODUCTORY RULES

Citation and commencement

1. These Rules may be cited as the Insolvency (England and Wales) Rules 2016 and come into force on 6th April 2017.

Revocations

2. The Rules listed in Schedule 1 are revoked.

Extent and application

3.—(1) These Rules extend to England and Wales only.

(2) These Rules as they relate to company voluntary arrangements under Part 1 of the Act, administration under Part 2 of the Act and winding up under Parts 4 and 5 of the Act apply in relation to companies which the courts in England and Wales have jurisdiction to wind up.

(3) These Rules do not apply to receivers appointed under section 51 (Scottish receivership).

Transitional and savings provisions

4. The transitional and savings provisions set out in Schedule 2 have effect.

Power of the Secretary of State to regulate certain matters

5.—(1) Under paragraph 27 of Schedule 8 and paragraph 30( 3) of Schedule 9 to the Act, the Secretary of State may, subject to the Act and the Rules made under it, make regulations with respect to any matter provided for in the Rules relating to the carrying out of the functions of—

(a) a liquidator, provisional liquidator, administrator or administrative receiver of a company;

(b) an interim receiver appointed under section 286( 4); and

(c) a trustee of a bankrupt's estate.

(2) The regulations that may be made may include, without prejudice to the generality of paragraph (1), provision with respect to the following matters arising in companies winding up and individual bankruptcy—

(a) the preparation and keeping by liquidators, trustees, provisional liquidators, interim receivers and the official receiver, of books, accounts and other records, and their production to such persons as may be authorised or required to inspect them;

(b) the auditing of liquidators' and trustees' accounts;

(c) the manner in which liquidators and trustees are to act in relation to the insolvent company's or bankrupt's books, papers and other records, and the manner of their disposal by the responsible office-holder or others;

(d) the supply of copies of documents relating to the insolvency and the affairs of the insolvent company or individual (on payment, in such cases as may be specified by the regulations, of the specified fee)—

(i) by the liquidator in company insolvency to creditors and members of the company, contributories in its winding up and the liquidation committee; and

(ii) by the trustee in bankruptcy to creditors and the creditors' committee;

(e) the manner in which insolvent estates are to be distributed by liquidators and trustees, including provision with respect to unclaimed funds and dividends;

(f) the manner in which moneys coming into the hands of a liquidator or trustee in the course of the administration of the proceedings are to be handled and invested, and the payment of interest on sums which have been paid into the Insolvency Services Account under regulations made by virtue of this sub-paragraph;

(g) the amount (or the manner of determining the amount) to be paid to the official receiver as remuneration when acting as provisional liquidator, liquidator, interim receiver or trustee.

(3) Regulations made under this rule may—

(a) confer a discretion on the court;

(b) make non-compliance with any of the regulations a criminal offence;

(c) make different provision for different cases, including different provision for different areas; and

(d) contain such incidental, supplemental and transitional provisions as may appear to the Secretary of State necessary or expedient.

Punishment of offences

6. Schedule 3 sets out the punishments for certain contraventions of these Rules.

Review

7.—(1) The Secretary of State must from time to time—

(a) carry out a review of these Rules;

(b) set out the conclusions of the review in a report; and

(c) publish the report.

(2) The report must in particular—

(a) set out the objectives intended to be achieved by the regulatory system established by these Rules;

(b) assess the extent to which those objectives are achieved; and

(c) assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.

(3) The first report under this rule must be published before the end of the period of five years beginning with the day on which these Rules come into force.

(4) Reports under this rule are afterwards to be published at intervals not exceeding five years.

PART 1

SCOPE, INTERPRETATION, TIME AND RULES ABOUT DOCUMENTS

CHAPTER 1

Scope of these Rules

Scope

1.1.—(1) These Rules are made to give effect to Parts 1 to 11 of the Insolvency Act 1986 and to the EC Regulation.

(2) Consequently references to insolvency proceedings and requirements relating to such proceedings are, unless the context requires otherwise, limited to proceedings in respect of Parts 1 to 11 of the Act and the EC Regulation (whether or not court proceedings).

CHAPTER 2

Interpretation

[Note: the terms which are defined in rule 1.2 include some terms defined by the Act for limited purposes which are applied generally by these Rules. Such terms have the meaning given by the Act for those limited purposes.]

Defined terms

1.2.—(1) In these Rules, unless otherwise stated, a reference to a Part or a Schedule is to a Part of, or Schedule to, these Rules.

(2) In these Rules—

“the Act” means the Insolvency Act 1986, and—

(a) a reference to a numbered section without mention of another Act is to that section of the Act; and

(b) a reference to Schedule A1, B1, 4ZA, 4ZB or 4A is to that Schedule to the Act;

“appointed person” means a person as described in paragraph (3) who is appointed by an office-holder (other than the official receiver);

“Article 1.2 undertaking” means one of the following within the meaning of Article 1.2 of Council Regulation (EC) No. 1346/2000( 5) (“the EC Regulation”)—

(a) an insurance undertaking;

(b) a credit institution;

(c) an investment undertaking which provides services involving the holding of funds or securities for third parties;

(d) a collective investment undertaking;

[Note: “associate” is defined by section 435];

“attendance” and “attend”—

(a) a person attends a meeting who is present, or attends remotely in accordance with section 246A( 6) or rule 15.6, or who participates in a virtual meeting; and whether

(b) that person attends in person, by proxy, or by corporate representative (in accordance with section 434B or section 323 of the Companies Act, as applicable);

“authenticate” means to authenticate in accordance with rule 1.5;

“authorised deposit-taker” means a person with permission under Part 4A of the Financial Services and Markets Act 2000( 7) to accept deposits; this definition must be read with—

(a) section 22 of that Act( 8) and any relevant order under that section; and

(b) Schedule 2 to that Act;

[Note: “bankrupt's estate” is defined in section 283];

“bankruptcy application” means the bankruptcy application submitted by the debtor to the adjudicator requesting the making of a bankruptcy order against the debtor;

“bankruptcy file” means the file opened by the adjudicator in accordance with rule 10.47;

“bankruptcy restrictions register” means the register referred to in rule 11.13(2) of matters relating to bankruptcy restrictions orders, interim bankruptcy restrictions orders and bankruptcy restrictions undertakings;

“business day” means, for the purposes of these Rules as they relate to Parts 7A to 10 of the Act (insolvency of individuals; bankruptcy), any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales [Note: for the purposes of these Rules as they relate to Parts 1 to 7 of the Act (company insolvency; company winding up) section 251 defines “business day” as including additionally a day which is a bank holiday in Scotland];

“centre of main interests” has the same meaning as in the EC Regulation;

“certificate of service” means a certificate of service which complies with the requirements in Schedule 4;

“Companies Act” means the Companies Act 2006( 9);

[Note: the term “connected” used of a person in relation to a company is defined in section 249 of the Act];

“consumer” means an individual acting for purposes that are wholly or mainly outside that individual's trade, business, craft or profession;

[Note: “contributory” is defined by section 79];

“convener” means an office-holder or other person who seeks a decision in accordance with Part 15 of these Rules;

[Note: “the court” is defined by section 251 for the purposes of these Rules as they relate to Parts 1 to 7 of the Act (company insolvency; company winding up) and by section 385(1) for the purposes of these Rules as they relate to Parts 7A to 10 of the Act (insolvency of individuals; bankruptcy);

“CPR” means the Civil Procedure Rules 1998( 10);

“credit reference agency” means a person authorised or permitted by the Financial Conduct Authority to carry on the regulated activity of providing credit references;

“CVA” means a voluntary arrangement in relation to a company under Part 1 of the Act;

“debt” is defined in rule 14.1(3) for the purposes of administration and winding up and “small debt” is also defined in rule 14.1(3) for administration,...

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