Consultation to simplify insolvency process launched
Proposals to simplify Insolvency Rules such as allowing electronic submissions is launched by the Insolvency Service
PROPOSALS to simplify Insolvency Rules and create a more streamlined process have been launched by the Insolvency Service.
The consultation, which brings together 24 statutory instruments, suggests ways to make it easier to make electronic submissions and cut red tape.
According to the Insolvency Service, the proposals are aimed at creating a “more streamlined structure free of archaic and often impenetrable language”.
The current rules have been in force since 1986 with various amendments brought in over the years to keep up with changing technology and case law.
As part of the change, the structure of the process is likely to change in order to make it run clearly and logically, the government body said.
Some of the content changes include: using plain English and improving consistency to make the rules easier to understand and to improve consistency across the procedures; making it easier for documents to be delivered electronically; 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.
Deputy chief executive of the Insolvency Service, Graham Horne, said: “We have listened to our stakeholders and want to modernise the Insolvency Rules so that they are easier to understand and apply.
“This consultation is a great opportunity for people who use the Rules to help us ensure they are fit for modern needs.”
It also includes some aspects of a seperate consultation that has yet to close, The Red Tape Challenge, which was put forward in July, aimed at reducing unnecessary regulatory burdens on insolvency.
It is anticipated that £36m will be saved due to the Red Tape Challenge across insolvency law. Some of the proposals in the Red Tape Challenge that are incorporated into the simplification consultation are: removing creditor meetings as a default for decision making; abolition of final creditor meetings in bankruptcy and liquidation where an IP is appointed; and putting information online.
The simplification consultation “Insolvency Rules 1986 – modernisation of rules relating to insolvency law” closes on 24 January 2014 and is aimed at insolvency practitioners, judges, lawyers and people involved in insolvency issues such as creditors and debtors.