The Insolvency Service (IS) has announced plans to modernise and streamline existing insolvency rules and replace them with what it describes as ‘a single set of rules fit for the 21st century’, reports Harris & Co chartered accountants.
The current rules have been in force since 1986 and have been subject to regular amendments. They provide a procedural framework in England and Wales for the Insolvency Act 1986, setting out requirements for the majority of insolvency procedures. Under IS proposals, 24 statutory instruments will be brought together. There will also be common provision for processes, such as meetings of creditors, that apply across different insolvency procedures.
As well as re-ordering the rules on clearer and more logical lines, the IS wants to make it easier for documents to be delivered by electronic means, rather than relying on statutory forms. It also intends to use plain English to improve clarity and consistency, after feedback from an earlier consultation showed users wanted a more streamlined structure free of archaic and often impenetrable language.
There will be some content changes, including 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.
The IS says the modernised and consolidated rules, including plans to change the need for creditor meetings and contact, will deliver many insolvency law Red Tape Challenge proposals identified under the government’s programme to scrap and reform ineffective regulation.
IS deputy chief executive 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.’