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New practice direction on insolvency proceedings (February 2012)
Practical Law UK Legal Update 8-518-2492 (Approx. 5 pages)
New practice direction on insolvency proceedings (February 2012)
by PLC Restructuring and Insolvency
| Published on 29 Feb 2012 • England, Wales |
A new practice direction on insolvency proceedings came into force on 23 February 2012. It contains procedural requirements for various aspects of proceedings under the Insolvency Act 1986 and the Insolvency Rules 1986 (SI 1986/1925). (Free access)
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A new practice direction on insolvency proceedings was published on the Judiciary of England and Wales website on 28 February 2012. The new practice direction came into force on 23 February 2012 and replaces the former practice direction on insolvency proceedings.
The new practice direction contains procedural requirements for various aspects of proceedings under the Insolvency Act 1986 and the Insolvency Rules 1986 (SI 1986/1925). Its provisions are important for anyone involved in either:
- An application starting insolvency proceedings, namely a winding-up or bankruptcy petition.
- Any court application in the context of existing insolvency proceedings, such as the fixing of an office-holder's remuneration.
PLC Restructuring and Insolvency will shortly publish a detailed analysis of the new practice direction and update our maintained materials.
A new practice direction on insolvency proceedings came into force on 23 February 2012, replacing Practice direction on insolvency proceedings [2007] BCC 842. The new practice direction introduces a number of significant changes, including:
- The heading of all court documents in insolvency proceedings is prescribed (paragraph 4).
- Certain applications may, in some circumstances, be served out of the jurisdiction (but within the EU) without the need to obtain the court's permission (paragraph 6.5).
- When making an urgent application, it is necessary to complete a certificate setting out the reasons for the urgency (paragraph 9.1).
- Applications to extend an administration must now be made at least one month before the end of the administration, unless there are special circumstances (paragraph 10.1).
- There are several changes to the procedure in winding-up proceedings. For example, the statement of truth verifying the petition must have been made within ten business days of the petition being issued (paragraph 11.3).
- There are new procedural requirements on an application for a validation order under section 127 or 284 of the Insolvency Act 1986 (paragraphs 11.8 and 14.8). The new practice direction largely incorporates the provisions of Practice note: Validation orders [2007] BCC 91.
- A statutory demand served on an individual is deemed to have been served on either the:
- date applicable to the method of service in CPR 6.26; or
- date of advertisement under rule 6.3 of the Insolvency Rules 1986 (SI 1986/1925).
(Paragraph 13.1.1.)As a result, if a statutory demand is served personally after 4.30 pm on a business day, it will not be deemed to have been served until the next business day. - There is a change to the wording of the certificate in a creditor's bankruptcy petition regarding a search for petitions against the debtor (paragraph 14.3.1).
- The former provisions regarding bankruptcy restrictions orders have been removed (paragraph 16A.12-16A.24).
- There are new provisions about the disclosure of a person's current address where there is a risk of violence against the person (paragraph 18).
- The procedure on appeals in insolvency proceedings is now largely governed by CPR 52 and its associated Practice Direction (paragraphs 19.9.1-19.9.2).
- There are detailed guidelines on applications relating to the remuneration of office-holders (paragraph 20).