07/07/14
Small Business, Enterprise and Employment Bill
As mentioned in our news item to members of 19 June 2014, the Queen's Speech included in the legislative programme a Small Business, Enterprise and Employment Bill.
The Bill has now been laid before Parliament (on 25 June 2014), and includes a number of measures proposed in the 2013 Trust and Transparency and Red Tape Challenge consultations (see the Technical Committee's responses to these consultations below 30 and 34). The Department for Business, Innovation and Skills has issued a number of Factsheets setting out the key features of the parts of the Bill (link here)
The insolvency related provisions in the Bill (which also would make a number of amendments in Scotland and Northern Ireland) fall under the general headings of director disqualification, claims by office holders, insolvency procedures and regulation of insolvency practitioners. The key points are set out below.
Directors' disqualification (Part 9 of the Bill)
Office holder claims (Part 10)
Removal of need for sanction, meetings, notices to creditors, proving for small debts (Part 10)
Subject to further provisions in the Insolvency Rules, the Bill provides for:
In addition, the Bill provides for the extension by consent of an administrator's term of office by up to 12 months, and for the abolition of fast track voluntary arrangements.
Regulation of insolvency practitioners (clauses 125 - 134)
As envisaged by the Ministerial Statement on prepacks covered in our previous news item, the Bill includes a reserve power for the Secretary of State to make regulations prohibiting or imposing conditions on transactions between administrators and connected parties. This reserve power is not limited to prepack administration sales.
As set out in our responses to the consultation papers which preceded the Bill (see the links above to the ILA website), many of the steps proposed in the Bill are welcome. There are however matters on which we have expressed concern, both in principle and on "workability" grounds. These include in particular the risks of abuse if office holder claims are tradable, and the operation of compensation claims against disqualified directors by the Secretary of State and the treatment of the proceeds of such claims.
The Technical Committee will provide further updates to members as the Bill progresses through Parliamentary Committee stage and beyond.
Technical Committee's responses (30)
Technical Committee's responses (34)
A key service provided by the ILA is the provision of bulletins keeping its membership up-to-date with the latest developments in insolvency law.
Below are a selection of recent topics covered: