insolvencypractitioner

September 2015www.insolvency-practitioners.org.uk

On 27 July, the RPBs collectively issued the latest iteration of SIP 9 in draft form, for Public Consultation. Whilst the timing of the consultation is accepted as less than ideal (given the holiday period), even with a truncated consultation period, it seems unlikely that a new SIP will be issued concurrently with the commencement of the Insolvency (Amendment) Rules 2015 on 1 October.

The consultation closes on 4 September 2015. The JIC working group will then need to collate and review the responses it has received from the profession and other stakeholders and refer a revised draft back to JIC when it meets later in the month. The revised SIP will then need to go through the various RPBs’ approval processes. In the case of the IPA, that means consideration by its Practice Guidance, Ethics and Standards Committee (PGES), followed by a recommendation from them to IPA Council as to whether the SIP should be issued. Other RPBs have their own processes and committee structures, the timing of which may impact on issuing the new SIP. The present timetable envisages issue of the new SIP on 1 November 2015, though in

light of the above, this appears ambitious unless there is some early unanimity of agreement about its contents.

The principles-based approach of the current draft has met with mixed responses from IPA members. This approach provides for the current appendix (Suggested Format for the Provision of Information) being removed from it. At the IPA Annual Conference in April, delegates were asked to vote on whether they considered the SIP should continue to provide a suggested format or template, for the provision of time costs information (and fee estimates, as will be required under the new Rules). Further votes were taken at our Regional Roadshows during June and recently a survey of members was conducted to establish if this was the more widely held view amongst members. In all instances, there was overwhelming support for a suggested format to continue to be provided, though rather more mixed views about whether this necessarily needs to be as an appendix to the SIP itself. The IPA will use these results to inform its own response to the Public Consultation upon its members’ behalf.

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IPA NEWSThe Insolvency Rules 2016 The Insolvency Service recently published the latest draft of the Insolvency Rules 2016. These are now with the Insolvency Rules Committee, whose role is to review the changes to rules before reporting to the Lord Chancellor. Subject to this work, it is anticipated that the Rules will be made in Spring 2016, with a commencement date of 1 October 2016.

Refresher on Regulation – SOLD OUT The IPA recently hosted a small group of its practitioners for a one-day class-room style refresher course on the requirements of the Ethics Codes, SIPs and IGPs. Feedback was excellent and the repeat events planned for September and November are fully booked. Due to demand, further events are planned for February and March in London, Liverpool and Manchester. Contact joannb@ipa.uk.com if you would like to register your interest in attending a future event.

Annual DinnerThe IPA Annual Dinner will be held at the Royal Institute of British Architects on 24 September 2015. Previous years’ dinners have proved to be highly successful and have created an excellent ambience in which to discuss topics of the day with your colleagues and peers. If you would like to attend the Annual Dinner this year please email events@ipa.uk.com.

Regional RoadshowsAutumn Programme100% rate quality of content of Spring programme as “good” or “excellent”

The IPA’s popular Regional Roadshow programme will continue on 1 October 2015 with a visit to Birmingham. Further events will be held in Belfast on 14 October 2015 and conclude in London on 4 November 2015. Excellent delegate feedback from the Spring programme saw delegates in Leeds, Manchester and Bristol overwhelmingly rate these events as “good value for money” (96%).

The IPA’s Regional Roadshows are part of our continuing commitment to provide our members with high quality and affordable CPE, at a time when we appreciate training budgets are stretched. With the implementation of the Insolvency (Amendment) Rules 2015 on 1 October 2015, and new SIPs 1, 16, and 9 in the pipeline, there will certainly be plenty to consider and discuss. Prices start from only £100 +VAT. To book your place visit our website or contact: events@ipa.uk.com

SIP 9 Consultation – IPA Members have their say

Forthcoming Events

2015

The Non-Administrative Receivers Association (NARA) was formed in 1995 by a group of professionals from property, legal, and insolvency backgrounds, to promote professional standards and provide training for Fixed Charge Receivers and LPA Receivers. However, NARA has always been a professional trade body (akin to R3), rather than a regulatory body, such as the IPA or RICS.

On 1 June 1999, the Fixed Charge Receivers’ Scheme was established as a joint initiative between the Royal Institute of Chartered Surveyors (RICS), the Insolvency Practitioners Association (IPA), and ACCA in collaboration with NARA. Scheme members are able to call themselves “Registered Property Receivers” (RPRs); a designation which is becoming increasingly recognised by banks and other appointers as a mark that can be trusted. There is currently no statutory requirement for fixed charge and LPA receivers to be regulated, however, this voluntary scheme seeks to improve trust and public confidence.

In 2013, a new Joint Regulatory Committee (JRC) was formed by RICS and IPA to oversee the scheme’s operations. To ensure public confidence in its independence, JRC is comprised mainly of lay members, a lay chairperson and has only 2 practitioner representatives from RICS and the IPA. The new committee is extremely pro-active and has been essential in driving the scheme forward.

To ensure RPRs reach and maintain the expected standards of professional practice, admission to the scheme is via application and involves applicants meeting qualification, peer interview and experience requirements. The RPR examinations are held annually and are administered by the IPA. Examination papers are written by experienced RPRs, such as myself. Qualified insolvency professionals (i.e. holders of the Joint Insolvency Examination) are exempt from sitting the examination, although the peer interview and experience requirements apply to all.

Whist scheme membership is voluntary,

I would actively encourage Insolvency Practitioners to consider membership, if they are seeking fixed charge or LPA receivership appointments. For further information on joining the scheme, visit the IPA website or contact membership@ipa.uk.com.

9 September 2015 All Day Practical Insolvency Course London

24 September 2015 Evening Annual Dinner London

1 October 2015 Morning Regional Roadshow Birmingham

14 October 2015 Morning Regional Roadshow Belfast

2 November 2015 Morning JIEB Liquidation Exam Various

3 November 2015 Morning JIEB ACVAR Exam Various

4 November 2015 Morning JIEB Personal Insolvency Exam Various

4 November 2015 Morning Regional Roadshow London

3 December 2015 All day Personal Insolvency Conference Manchester

4 December 2015 Morning CPI/CPPI Exams [TBC] Various

28 January 2016 Evening IPA Annual Lecture London

Fixed Charge Receivership Scheme for registered property receiversBy Nick Hancock, Partner, UHY Hacker Young

JIEB 2014 First Prize winner

This is the second edition of this book, 6 years after the first edition. The authors are both partners in the property group at Charles Russell Speechlys solicitors.

As you would expect from a book published by Jordan Publishing, it provides a full account of the modern law relating to property insolvency. At 444 pages long, it is a comprehensive guide to both formal and informal property insolvency and covers everything from the Statute of Marlborough 1267 to the introduction of Commercial Rent Arrears Recovery in 2014.

At the start of the book is a foreword

BOOK REVIEW: Property InsolvencyBy Peter Levaggi and Roger Elford

Robert Pick, Director, Menzies

from Peter Arden QC of Erskine Chambers who neatly summarises the significant changes that have taken place in the property sector since the first edition was published.

After a short introduction and overview of insolvency the book is split in to 5 parts: the tenant’s insolvency; freeholder/landlord insolvency; mortgagees and receivers; property assets and personal insolvency and property taxation and insolvency. I particularly found useful the sections dealing with the evolution of the administration expenses regime and the use of Company Voluntary Arrangements particularly in relation to multi-site retailers.

The book is aimed at lawyers, property and insolvency professionals. Clearly this is a “must have” book for those who are involved in this specialist area. I would also strongly recommend this book for students taking the RPR exam. For those readers that do not want to carry around the book with them, there is also the convenience of a CD inside the back cover.

About the authorNick Hancock is a dedicated insolvency and corporate recovery partner at UHY Hacker Young. He is used to handling a large variety of situations, in particular property investment and construction related businesses. Nick became a member of the Registered Property Receivers’ Scheme after being extremely active and successful in the property sector.

Nick Hancock

David Kerr, IPA CEO, presented Russel Simpson of Grant Thornton his prize for being the overall JIEB 2014 First Prize winner at an awards ceremony held on 19 June at the BMA, Tavistock Square.

Russel, an IPA member, has been invited to collect a further prize for being the highest marked IPA candidate at our Annual Dinner on 24 September 2015.

Richard Turton had a unique role in the formation and management of INSOL Europe, INSOL International, The Insolvency Practitioners Association and R3, the Association of Business Recovery Professionals in the UK. In recognition of his achievements the four organisations jointly created an award in his memory. The Richard Turton Award is an annual award providing an educational opportunity for a qualifying participant to attend the annual INSOL Europe Conference and have a technical paper published.

Applications for the award were invited to write a statement detailing why they should be chosen in less than 200 words. A panel representing the four associations adjudicated the applications. There were many excellent submissions and the judges task was very difficult this year. The Committee is delighted to announce that the winner is Waiswa Abudu Sallam

from Uganda. Waiswa works for the Uganda Revenue Authority in the Debt Collection Department.

Waiswa is currently studying for a Master of Laws in Corporate and Insolvency Law at Nottingham Trent University, UK (by distance learning). This is the first time we have had a winner from Uganda. As part of the award, Waiswa is invited to attend the INSOL Europe Conference which will be held on the 1-4 October in Berlin, Germany. He will be writing a paper that will be published in summary in one or more of the Member Associations’ journals and in full on their websites.

Richard Turton Award 2015

Waiswa Abudu Sallam, winner of the Richard Turton Award 2015

insolvencypractitioner

September 2015www.insolvency-practitioners.org.uk

insolvency

Laura Bullock CPI 1st place E&W Rimes & Co Ltd

Aiste Best CPI 2nd place E&W Saud & Company Ltd

Kirsty Irving CPPI 1st place E&W Stepchange Debt Charity

Sian Jones CPCI 1st place E&W EY

David Bonthrone CPI 1st place Scotland KPMG LLP

Paul Yates CPPI 1st place Scotland Gregory Pennington Ltd

CPI/CPPI/CPCI Prize Winners June 2015

2 3 4

profile of individuals involved rather than the nature of the insolvency and it is vital that any comments made are relevant, factual, professional and do not risk breaching the confidentiality principle in the Ethics Code.

In a recent case, a member’s comments to a reporter disclosed or confirmed information about an insolvency case that not only had little to no bearing on the work they were doing as insolvency officeholder, but which were also considered by some to be insensitive in the circumstances of the case, and a potential cause of distress to some. The reported comments risked putting the profession in a bad light and resulted in various expressions of concern by members of the general public.

When considering the complaint, the Investigation Committee took into account some highly unusual mitigating circumstances, such that it did not see fit to propose a published sanction against the individual practitioner. However, members are advised that instances of the kind described above would normally result in a published sanction and fine being proposed with due reference to the Common Sanctions Guidance. A serious view will ordinarily be taken where public confidence in the profession is damaged by an IP’s conduct.

Where practitioners have retained a publicity agent or have access to suitably trained personnel within their firms, they should ensure that they and their staff maintain a strict policy of referring all press enquiries to those appointed individuals. Where there is no access to such services, practitioners should undertake specific training on how to respond to press enquiries to ensure that instances of the kind described above do not risk bringing the profession into disrepute. In all cases, members should be mindful of the fundamental principle of confidentiality contained in the Ethics Code.

Regulatory Notices

enquiries and case progression delays. Members are reminded that actions which may bring the profession into disrepute are part of the Committee’s considerations when determining a complaint and, where a prima facie case has been found, applying relevant sanctions in accordance with the Common Sanctions Guidance.

Duty to Co-operateMembers should be aware that failure to co-operate with the complaints process by either not providing relevant information to resolve a complaint or by failing to respond in a timely manner to the Secretariat and/or Committee’s correspondence may result in a separate complaint being opened against them in accordance with the above Rules, and continued failure will result in sanctions being applied in accordance with the Common Sanctions Guidance. The first 6 months has seen the first publicised ICR4.2 sanction being applied by the Committee.

Costs associated with Consent OrdersHistorically the IPA has sought a token contribution to costs when agreeing a Consent Order with a member, but with the benefit of accurate time recording on individual complaints is seeking to recover costs in line with the level of work undertaken in investigating a complaint, commensurate with the sanction applied. With reference to the ICR4.2 matter above, it is clearly in the members’ interest to avoid unnecessary work by the Secretariat and the delay that creates.

Dealing with press enquiriesA recent complaint has highlighted the need for practitioners to take extra care when handling press enquiries about insolvency cases. Practitioners will have come across insolvency cases where there is press interest, sometimes because of the

Suggested format for time cost information - a possible compromise?

Advocates of the principles-based approach to SIPs would say that provision of a suggested format for the provision of information is tantamount to prescribing one. “Suggested” will continue to be taken as “recommended” or even “required”, irrespective of whether the information it provides to creditors is meaningful or useful. They would add that there is a need, as identified by Professor Kempson, for IPs to focus on the narrative explanation they provide, rather than the automated completion of a matrix. At the very least, conceptually it would seem fair to say that there is a tension between providing a “suggested” format as an appendix to a document that is otherwise mandatory.

But as our recent survey has shown, IPA members have been quite clear about what they want. At a recent PGES meeting, one senior compliance manager made the point that whilst the narrative

may be the most important aspect in properly explaining fees, or proposed fees, to those effectively paying them, the narrative still needs to be providing an explanation of some actual numbers, which will generally be more clearly presented in a tabulated form.

So perhaps one alternative might be for the current appendix to be retained in the form of an Insolvency Guidance Paper? In doing so, the mandatory principles and expected standards can keep their principles focus and emphasise the importance of the narrative elements, whilst practitioners will receive the guidance they seek about the format. And creditors will retain some level of consistency (albeit that views amongst the creditor community appear mixed about whether they want consistency of presentation).

Ultimately, with the introduction of regulatory objectives, it seems likely that there will be a shift in regulatory focus towards the qualitative assessment of the narrative explanations provided by

Alison Curry, Head of Regulatory Standards, IPA

Investigation Committee Rules 4.1/4.2 Rule 4.1: The Committee shall have power by Notice served on the Relevant Person to call for and it shall be the duty of every Relevant Person to provide and if so requested by the Committee to use best endeavours to procure that any third party stipulated by the Committee shall provide within such time as may reasonably be prescribed by the Committee, such further information including books, papers and records, as the Committee considers necessary, to enable it to decide whether or not there is a prima facie case against the Relevant Person. Every such Relevant Person shall also, if so requested by the Committee, provide access where possible to premises at which any such books, papers and records may be kept.

Rule 4.2: Where a request is made under 4.1 and the Relevant Person fails to comply with any such request within the time prescribed by the Committee, such failure may be treated as a Complaint under Rule 2.2.

practitioners, rather than the objective accuracy of the numerical information and their adherence to due process. This has been seen already in the context of SIP 16. Conversely, creditors may need to accept that writing a report from scratch to avoid repetitious, standard paragraphs being cut and pasted from previous reports will involve more time, and therefore, cost. It seems only logical that a bespoke product will always be more expensive than a generic one; a matter to which many personal insolvency practitioners would undoubtedly testify.

BADAS, as it was inevitably going to be known, came into effect on 1 April 2015, to much fanfare from the Scottish Government, and some groaning from the profession. Was yet more change really required? So, what’s happened in the first few months of the new Act, and what should we as a profession be looking out for further down the line?

At the time of writing, the Accountant in Bankruptcy has just released its statistical analysis of Quarter 1 appointments under the new regime. It is clear, comparing these to the statistics for the preceding Quarter 4, the last under the 2008 statutory regime, that debtors and their advisers voted with their feet and the Accountant in Bankruptcy saw a deluge of debtor applications in that final quarter.

Debtors opted for a short period of aquirenda (the equivalent of after-acquired property) and a three year period of

contribution rather than the increased four (on both counts) and I suspect, in some cases, the flexibility of a contribution set in agreement between the debtor and Trustee, rather than the now compulsory framework of the Common Financial Tool or Statement.

The new Minimal Asset Process (MAP), designed to replace Low Income Low Asset (LILA) as an entry route has been slow to take off, but the Accountant in Bankruptcy is expecting the MAP sequestration process to become more popular in due course. Newly announced UK Government policies on welfare and tax credits may also play a role in an increased uptake.

The requirement for mandatory money advice pre-application and the setting of a Debtor Contribution Order up-front have placed a significant burden onto the money adviser before sequestration is awarded.

Another welcome change is the ability to

Bankruptcy and Debt Advice (Scotland) Act 2014Eileen Maclean, Director of Insolvency Support Services Limited

shorten the first accounting period to six months, effectively reinstating the pre 2008 position. While designed to allow early distributions in cases with significant funds, it will also facilitate a degree of working capital management.

Although the great unknown at the moment is the impact of the changed discharge procedure, which is no longer automatic, and has to be actively applied for by the Trustee. We will need to wait and see what the practical implications of these changes are, one year from now.

And dare I say it, there would appear to have been a missed opportunity. There has been no wholesale consultation on the role of the debtor’s family home in sequestration, or an attempt to straighten out the exemption provisions for the debtor’s dwelling house in protected trust deeds. Next time perhaps?

A recent High Court decision (James Green v James Wright [2015] EWHC 993 (Ch)) may have an impact on how PPI refunds, and any other unrealised arrangement assets, are dealt with in completed IVA cases.

Following closure of an IVA, it was discovered that the individual had funds owing to him as a result of a PPI claim. The funds were paid to the former Supervisor as they were considered to be assets comprised within the IVA which should be utilised for the benefit of creditors. The voluntary arrangement proposal contained an “all assets” clause and utilised the R3 Standard Conditions V2. It was not disputed that the PPI monies would have been an asset of the arrangement if realised prior to its conclusion.

The Court was asked to consider the effect of the issuing of a completion certificate on the availability of a PPI claim to the arrangement. In this instance the Court ordered that the proceeds of the PPI claims were due and payable to the debtor, as the issuing of a completion statement had brought any continuing trust over them to an end (in contrast to the situation where an arrangement had been terminated, rather than completed successfully, where a trust may have continued, depending upon the terms of the arrangement).

The clauses relating to the effect of issuing a completion statement in both the R3 and IVA Protocol Conditions are written in identical terms and state that the debtor shall be released from all debts which are subject to the arrangement. As previously noted in the January 2012 “Further Guidance on Paymex”, where creditors had received all that they could have expected from an arrangement, there can be no continuing trust for their benefit as a trust must

PPI claims in completed IVAshave beneficiaries in order for it to survive. It was held in the Green v Wright judgement that there were no beneficiaries, given that creditors’ claims had been discharged, and therefore, there was no continuing trust. The funds would, therefore, be held on a bare trust for the debtor.

In this case, the proposal was silent on whether a trust continued after completion of the arrangement and there was no express agreement reached with the debtor in advance of issuing the completion statement, as suggested by paragraph 4.2 of the PPI Guidance. Both the PPI Guidance and the absence of an express agreement were referred to by the Court in reaching its decision.

The case is to be appealed to the Court of Appeal, and consequently, it is too early to give definitive guidance on how IPs should react to this judgement. Practitioners should note that the current PPI Guidance is under review and issues raised by this decision will be considered as part of that process. In the meantime, where the intention is to realise assets after the conclusion of an arrangement, Practitioners may wish to obtain legal advice as to the precise terms of any agreement they propose to reach with a debtor, and the wording of the completion statement.

The judgement also reinforces the need for a clear and early dialogue with debtors about any potential PPI claims, and the impact pursuing them might have on the expected duration of their IVAs, with reference to the specific terms of their IVA proposals. Doing so may help practitioners to manage their clients’ expectations and avoid unnecessary complaints.

2015 continues to be a busy period for the Secretariat’s regulation department. Common themes and other issues arising from complaints referred to the Investigation Committee (IC/the Committee) are as follows:

SIPsSIP3/3a: There continues to be a number of findings in respect of poor initial advice being provided to debtors, poorly drafted proposals and modifications which have resulted in misinterpretations by either a debtor or a member, inadequate verification work carried out and failure to ensure a debtor’s assets have been secured in line with the terms of an individual voluntary arrangement or trust deed. Some of these findings could have been avoided had there been better quality control procedures in place.

SIP9: Prima facie findings have been made where members have failed to comply with the SIP9 resulting in unauthorised drawing of

disbursements and remuneration. Members should be aware that where the Membership and Authorisation Committee (M&A) refers unapproved remuneration drawn to IC if identified on inspection visits, prima facie findings invariably follow. The IC looks more favourably on those members where the matter has clearly been the result of an administrative error, the member admits the error, immediately repays the unauthorised amount to the estate, attempts to obtain proper authorisation and implements procedures to prevent recurrence of the error. Members are also reminded that IC may scrutinise fees drawn where it considers disclosures to creditors lack transparency.

SIP16: All recent SIP16 complaint findings have been on complaints raised by the Insolvency Service for poor SIP16 compliance. The Committee would stress to members that they must ensure their disclosures are issued in a timely manner

Regulatory themes arising from complaints received by the SecretariatJas Chauhan, Regulation Officer

and comply fully with the spirit as well as the detail of SIP16. A number of the complaints resulted from members failing to provide creditors with sufficient background and financial information regarding the circumstances leading to the pre-packaged administration, the statutory purpose of the administration, full details of assets [or reasons why these cannot be disclosed to creditors] and confirmation of the asset valuer’s qualifications and independence. On the plus side, SIP16 complaints have reduced. Nonetheless, there remains an industry-wide focus on SIP16 and pre-packaged sales.

Fundamental Principles of the Ethics CodeA number of misconduct findings have been made against members falling short of the fundamental principles of professional competence and due care, professional behaviour, integrity and objectivity. Actions which gave rise to these findings include accepting inappropriate (or potentially inappropriate) appointments which may bring the insolvency profession into disrepute, mishandling the sale of assets, failure to seek the appropriate sanction prior to entering into a compromise agreement, lack of clarity and transparency in communications, poor handling of press

DISCIPLINARY CONSENT ORDER 19 May 2015PURSUANT TO RULE 5 OF THE IPA INVESTIGATION COMMITTEE RULES Frank A Hatch, of Dudley, England a former IPA Member and Licensed Insolvency Practitioner.

This Order is made in relation to a complaint from the IPA Secretariat that Mr Hatch failed to provide information formally required pursuant to the Investigation Committee Rule 4.1 Notice issued on 3 November 2014. The information was required in order to progress a separate complaint investigation. Accordingly Mr Hatch was found liable to disciplinary action under the IPA’s Articles of Association.

The sanction reflects the decision that the complaint is aggravated by Mr Hatch’s repeated failure to respond in a timely manner or at all to letters, telephone calls and emails. The Investigation Committee decided to impose a disciplinary order that Mr Hatch be reprimanded, pay a fine of £1,500 and make a contribution to costs.

Regulatory themes arising from complaints received by the Secretariat (Continued)

DISCIPLINARY CONSENT ORDER 19 May 2015PURSUANT TO RULE 5 OF THE IPA INVESTIGATION COMMITTEE RULES Michael Howorth, of Accrington, England an IPA member and Licensed Insolvency Practitioner.

This order is made in relation to a complaint from a debtor that in his role as Supervisor, Mr Howorth failed to address creditors’ claims in a timely manner as a result of which the completion of the individual voluntary arrangement was significantly delayed. Accordingly Mr Howorth was found liable to disciplinary action under the IPA’s Articles of Association.

The sanction reflects the decision that the complaint is aggravated by Mr Howorth’s repeated conduct for which there had been an earlier finding against him. The Investigation Committee decided to impose a disciplinary order that Mr Howorth be reprimanded, pay a fine of £1,000 and make a contribution to costs.

Eileen Maclean

CVL FeesThere has been some concern and speculation amongst IPs about how the new provisions for fee estimates will work in the context of CVL cases. It is understood that the Insolvency Service will be issuing a Dear IP to clarify this, amongst a number of other matters. The draft SIP 9 reflects the position as we understand it, that a prospective liquidator is not precluded from providing a fee estimate to creditors.

2 3 4

profile of individuals involved rather than the nature of the insolvency and it is vital that any comments made are relevant, factual, professional and do not risk breaching the confidentiality principle in the Ethics Code.

In a recent case, a member’s comments to a reporter disclosed or confirmed information about an insolvency case that not only had little to no bearing on the work they were doing as insolvency officeholder, but which were also considered by some to be insensitive in the circumstances of the case, and a potential cause of distress to some. The reported comments risked putting the profession in a bad light and resulted in various expressions of concern by members of the general public.

When considering the complaint, the Investigation Committee took into account some highly unusual mitigating circumstances, such that it did not see fit to propose a published sanction against the individual practitioner. However, members are advised that instances of the kind described above would normally result in a published sanction and fine being proposed with due reference to the Common Sanctions Guidance. A serious view will ordinarily be taken where public confidence in the profession is damaged by an IP’s conduct.

Where practitioners have retained a publicity agent or have access to suitably trained personnel within their firms, they should ensure that they and their staff maintain a strict policy of referring all press enquiries to those appointed individuals. Where there is no access to such services, practitioners should undertake specific training on how to respond to press enquiries to ensure that instances of the kind described above do not risk bringing the profession into disrepute. In all cases, members should be mindful of the fundamental principle of confidentiality contained in the Ethics Code.

Regulatory Notices

enquiries and case progression delays. Members are reminded that actions which may bring the profession into disrepute are part of the Committee’s considerations when determining a complaint and, where a prima facie case has been found, applying relevant sanctions in accordance with the Common Sanctions Guidance.

Duty to Co-operateMembers should be aware that failure to co-operate with the complaints process by either not providing relevant information to resolve a complaint or by failing to respond in a timely manner to the Secretariat and/or Committee’s correspondence may result in a separate complaint being opened against them in accordance with the above Rules, and continued failure will result in sanctions being applied in accordance with the Common Sanctions Guidance. The first 6 months has seen the first publicised ICR4.2 sanction being applied by the Committee.

Costs associated with Consent OrdersHistorically the IPA has sought a token contribution to costs when agreeing a Consent Order with a member, but with the benefit of accurate time recording on individual complaints is seeking to recover costs in line with the level of work undertaken in investigating a complaint, commensurate with the sanction applied. With reference to the ICR4.2 matter above, it is clearly in the members’ interest to avoid unnecessary work by the Secretariat and the delay that creates.

Dealing with press enquiriesA recent complaint has highlighted the need for practitioners to take extra care when handling press enquiries about insolvency cases. Practitioners will have come across insolvency cases where there is press interest, sometimes because of the

Suggested format for time cost information - a possible compromise?

Advocates of the principles-based approach to SIPs would say that provision of a suggested format for the provision of information is tantamount to prescribing one. “Suggested” will continue to be taken as “recommended” or even “required”, irrespective of whether the information it provides to creditors is meaningful or useful. They would add that there is a need, as identified by Professor Kempson, for IPs to focus on the narrative explanation they provide, rather than the automated completion of a matrix. At the very least, conceptually it would seem fair to say that there is a tension between providing a “suggested” format as an appendix to a document that is otherwise mandatory.

But as our recent survey has shown, IPA members have been quite clear about what they want. At a recent PGES meeting, one senior compliance manager made the point that whilst the narrative

may be the most important aspect in properly explaining fees, or proposed fees, to those effectively paying them, the narrative still needs to be providing an explanation of some actual numbers, which will generally be more clearly presented in a tabulated form.

So perhaps one alternative might be for the current appendix to be retained in the form of an Insolvency Guidance Paper? In doing so, the mandatory principles and expected standards can keep their principles focus and emphasise the importance of the narrative elements, whilst practitioners will receive the guidance they seek about the format. And creditors will retain some level of consistency (albeit that views amongst the creditor community appear mixed about whether they want consistency of presentation).

Ultimately, with the introduction of regulatory objectives, it seems likely that there will be a shift in regulatory focus towards the qualitative assessment of the narrative explanations provided by

Alison Curry, Head of Regulatory Standards, IPA

Investigation Committee Rules 4.1/4.2 Rule 4.1: The Committee shall have power by Notice served on the Relevant Person to call for and it shall be the duty of every Relevant Person to provide and if so requested by the Committee to use best endeavours to procure that any third party stipulated by the Committee shall provide within such time as may reasonably be prescribed by the Committee, such further information including books, papers and records, as the Committee considers necessary, to enable it to decide whether or not there is a prima facie case against the Relevant Person. Every such Relevant Person shall also, if so requested by the Committee, provide access where possible to premises at which any such books, papers and records may be kept.

Rule 4.2: Where a request is made under 4.1 and the Relevant Person fails to comply with any such request within the time prescribed by the Committee, such failure may be treated as a Complaint under Rule 2.2.

practitioners, rather than the objective accuracy of the numerical information and their adherence to due process. This has been seen already in the context of SIP 16. Conversely, creditors may need to accept that writing a report from scratch to avoid repetitious, standard paragraphs being cut and pasted from previous reports will involve more time, and therefore, cost. It seems only logical that a bespoke product will always be more expensive than a generic one; a matter to which many personal insolvency practitioners would undoubtedly testify.

BADAS, as it was inevitably going to be known, came into effect on 1 April 2015, to much fanfare from the Scottish Government, and some groaning from the profession. Was yet more change really required? So, what’s happened in the first few months of the new Act, and what should we as a profession be looking out for further down the line?

At the time of writing, the Accountant in Bankruptcy has just released its statistical analysis of Quarter 1 appointments under the new regime. It is clear, comparing these to the statistics for the preceding Quarter 4, the last under the 2008 statutory regime, that debtors and their advisers voted with their feet and the Accountant in Bankruptcy saw a deluge of debtor applications in that final quarter.

Debtors opted for a short period of aquirenda (the equivalent of after-acquired property) and a three year period of

contribution rather than the increased four (on both counts) and I suspect, in some cases, the flexibility of a contribution set in agreement between the debtor and Trustee, rather than the now compulsory framework of the Common Financial Tool or Statement.

The new Minimal Asset Process (MAP), designed to replace Low Income Low Asset (LILA) as an entry route has been slow to take off, but the Accountant in Bankruptcy is expecting the MAP sequestration process to become more popular in due course. Newly announced UK Government policies on welfare and tax credits may also play a role in an increased uptake.

The requirement for mandatory money advice pre-application and the setting of a Debtor Contribution Order up-front have placed a significant burden onto the money adviser before sequestration is awarded.

Another welcome change is the ability to

Bankruptcy and Debt Advice (Scotland) Act 2014Eileen Maclean, Director of Insolvency Support Services Limited

shorten the first accounting period to six months, effectively reinstating the pre 2008 position. While designed to allow early distributions in cases with significant funds, it will also facilitate a degree of working capital management.

Although the great unknown at the moment is the impact of the changed discharge procedure, which is no longer automatic, and has to be actively applied for by the Trustee. We will need to wait and see what the practical implications of these changes are, one year from now.

And dare I say it, there would appear to have been a missed opportunity. There has been no wholesale consultation on the role of the debtor’s family home in sequestration, or an attempt to straighten out the exemption provisions for the debtor’s dwelling house in protected trust deeds. Next time perhaps?

A recent High Court decision (James Green v James Wright [2015] EWHC 993 (Ch)) may have an impact on how PPI refunds, and any other unrealised arrangement assets, are dealt with in completed IVA cases.

Following closure of an IVA, it was discovered that the individual had funds owing to him as a result of a PPI claim. The funds were paid to the former Supervisor as they were considered to be assets comprised within the IVA which should be utilised for the benefit of creditors. The voluntary arrangement proposal contained an “all assets” clause and utilised the R3 Standard Conditions V2. It was not disputed that the PPI monies would have been an asset of the arrangement if realised prior to its conclusion.

The Court was asked to consider the effect of the issuing of a completion certificate on the availability of a PPI claim to the arrangement. In this instance the Court ordered that the proceeds of the PPI claims were due and payable to the debtor, as the issuing of a completion statement had brought any continuing trust over them to an end (in contrast to the situation where an arrangement had been terminated, rather than completed successfully, where a trust may have continued, depending upon the terms of the arrangement).

The clauses relating to the effect of issuing a completion statement in both the R3 and IVA Protocol Conditions are written in identical terms and state that the debtor shall be released from all debts which are subject to the arrangement. As previously noted in the January 2012 “Further Guidance on Paymex”, where creditors had received all that they could have expected from an arrangement, there can be no continuing trust for their benefit as a trust must

PPI claims in completed IVAshave beneficiaries in order for it to survive. It was held in the Green v Wright judgement that there were no beneficiaries, given that creditors’ claims had been discharged, and therefore, there was no continuing trust. The funds would, therefore, be held on a bare trust for the debtor.

In this case, the proposal was silent on whether a trust continued after completion of the arrangement and there was no express agreement reached with the debtor in advance of issuing the completion statement, as suggested by paragraph 4.2 of the PPI Guidance. Both the PPI Guidance and the absence of an express agreement were referred to by the Court in reaching its decision.

The case is to be appealed to the Court of Appeal, and consequently, it is too early to give definitive guidance on how IPs should react to this judgement. Practitioners should note that the current PPI Guidance is under review and issues raised by this decision will be considered as part of that process. In the meantime, where the intention is to realise assets after the conclusion of an arrangement, Practitioners may wish to obtain legal advice as to the precise terms of any agreement they propose to reach with a debtor, and the wording of the completion statement.

The judgement also reinforces the need for a clear and early dialogue with debtors about any potential PPI claims, and the impact pursuing them might have on the expected duration of their IVAs, with reference to the specific terms of their IVA proposals. Doing so may help practitioners to manage their clients’ expectations and avoid unnecessary complaints.

2015 continues to be a busy period for the Secretariat’s regulation department. Common themes and other issues arising from complaints referred to the Investigation Committee (IC/the Committee) are as follows:

SIPsSIP3/3a: There continues to be a number of findings in respect of poor initial advice being provided to debtors, poorly drafted proposals and modifications which have resulted in misinterpretations by either a debtor or a member, inadequate verification work carried out and failure to ensure a debtor’s assets have been secured in line with the terms of an individual voluntary arrangement or trust deed. Some of these findings could have been avoided had there been better quality control procedures in place.

SIP9: Prima facie findings have been made where members have failed to comply with the SIP9 resulting in unauthorised drawing of

disbursements and remuneration. Members should be aware that where the Membership and Authorisation Committee (M&A) refers unapproved remuneration drawn to IC if identified on inspection visits, prima facie findings invariably follow. The IC looks more favourably on those members where the matter has clearly been the result of an administrative error, the member admits the error, immediately repays the unauthorised amount to the estate, attempts to obtain proper authorisation and implements procedures to prevent recurrence of the error. Members are also reminded that IC may scrutinise fees drawn where it considers disclosures to creditors lack transparency.

SIP16: All recent SIP16 complaint findings have been on complaints raised by the Insolvency Service for poor SIP16 compliance. The Committee would stress to members that they must ensure their disclosures are issued in a timely manner

Regulatory themes arising from complaints received by the SecretariatJas Chauhan, Regulation Officer

and comply fully with the spirit as well as the detail of SIP16. A number of the complaints resulted from members failing to provide creditors with sufficient background and financial information regarding the circumstances leading to the pre-packaged administration, the statutory purpose of the administration, full details of assets [or reasons why these cannot be disclosed to creditors] and confirmation of the asset valuer’s qualifications and independence. On the plus side, SIP16 complaints have reduced. Nonetheless, there remains an industry-wide focus on SIP16 and pre-packaged sales.

Fundamental Principles of the Ethics CodeA number of misconduct findings have been made against members falling short of the fundamental principles of professional competence and due care, professional behaviour, integrity and objectivity. Actions which gave rise to these findings include accepting inappropriate (or potentially inappropriate) appointments which may bring the insolvency profession into disrepute, mishandling the sale of assets, failure to seek the appropriate sanction prior to entering into a compromise agreement, lack of clarity and transparency in communications, poor handling of press

DISCIPLINARY CONSENT ORDER 19 May 2015PURSUANT TO RULE 5 OF THE IPA INVESTIGATION COMMITTEE RULES Frank A Hatch, of Dudley, England a former IPA Member and Licensed Insolvency Practitioner.

This Order is made in relation to a complaint from the IPA Secretariat that Mr Hatch failed to provide information formally required pursuant to the Investigation Committee Rule 4.1 Notice issued on 3 November 2014. The information was required in order to progress a separate complaint investigation. Accordingly Mr Hatch was found liable to disciplinary action under the IPA’s Articles of Association.

The sanction reflects the decision that the complaint is aggravated by Mr Hatch’s repeated failure to respond in a timely manner or at all to letters, telephone calls and emails. The Investigation Committee decided to impose a disciplinary order that Mr Hatch be reprimanded, pay a fine of £1,500 and make a contribution to costs.

Regulatory themes arising from complaints received by the Secretariat (Continued)

DISCIPLINARY CONSENT ORDER 19 May 2015PURSUANT TO RULE 5 OF THE IPA INVESTIGATION COMMITTEE RULES Michael Howorth, of Accrington, England an IPA member and Licensed Insolvency Practitioner.

This order is made in relation to a complaint from a debtor that in his role as Supervisor, Mr Howorth failed to address creditors’ claims in a timely manner as a result of which the completion of the individual voluntary arrangement was significantly delayed. Accordingly Mr Howorth was found liable to disciplinary action under the IPA’s Articles of Association.

The sanction reflects the decision that the complaint is aggravated by Mr Howorth’s repeated conduct for which there had been an earlier finding against him. The Investigation Committee decided to impose a disciplinary order that Mr Howorth be reprimanded, pay a fine of £1,000 and make a contribution to costs.

Eileen Maclean

CVL FeesThere has been some concern and speculation amongst IPs about how the new provisions for fee estimates will work in the context of CVL cases. It is understood that the Insolvency Service will be issuing a Dear IP to clarify this, amongst a number of other matters. The draft SIP 9 reflects the position as we understand it, that a prospective liquidator is not precluded from providing a fee estimate to creditors.

2 3 4

profile of individuals involved rather than the nature of the insolvency and it is vital that any comments made are relevant, factual, professional and do not risk breaching the confidentiality principle in the Ethics Code.

In a recent case, a member’s comments to a reporter disclosed or confirmed information about an insolvency case that not only had little to no bearing on the work they were doing as insolvency officeholder, but which were also considered by some to be insensitive in the circumstances of the case, and a potential cause of distress to some. The reported comments risked putting the profession in a bad light and resulted in various expressions of concern by members of the general public.

When considering the complaint, the Investigation Committee took into account some highly unusual mitigating circumstances, such that it did not see fit to propose a published sanction against the individual practitioner. However, members are advised that instances of the kind described above would normally result in a published sanction and fine being proposed with due reference to the Common Sanctions Guidance. A serious view will ordinarily be taken where public confidence in the profession is damaged by an IP’s conduct.

Where practitioners have retained a publicity agent or have access to suitably trained personnel within their firms, they should ensure that they and their staff maintain a strict policy of referring all press enquiries to those appointed individuals. Where there is no access to such services, practitioners should undertake specific training on how to respond to press enquiries to ensure that instances of the kind described above do not risk bringing the profession into disrepute. In all cases, members should be mindful of the fundamental principle of confidentiality contained in the Ethics Code.

Regulatory Notices

enquiries and case progression delays. Members are reminded that actions which may bring the profession into disrepute are part of the Committee’s considerations when determining a complaint and, where a prima facie case has been found, applying relevant sanctions in accordance with the Common Sanctions Guidance.

Duty to Co-operateMembers should be aware that failure to co-operate with the complaints process by either not providing relevant information to resolve a complaint or by failing to respond in a timely manner to the Secretariat and/or Committee’s correspondence may result in a separate complaint being opened against them in accordance with the above Rules, and continued failure will result in sanctions being applied in accordance with the Common Sanctions Guidance. The first 6 months has seen the first publicised ICR4.2 sanction being applied by the Committee.

Costs associated with Consent OrdersHistorically the IPA has sought a token contribution to costs when agreeing a Consent Order with a member, but with the benefit of accurate time recording on individual complaints is seeking to recover costs in line with the level of work undertaken in investigating a complaint, commensurate with the sanction applied. With reference to the ICR4.2 matter above, it is clearly in the members’ interest to avoid unnecessary work by the Secretariat and the delay that creates.

Dealing with press enquiriesA recent complaint has highlighted the need for practitioners to take extra care when handling press enquiries about insolvency cases. Practitioners will have come across insolvency cases where there is press interest, sometimes because of the

Suggested format for time cost information - a possible compromise?

Advocates of the principles-based approach to SIPs would say that provision of a suggested format for the provision of information is tantamount to prescribing one. “Suggested” will continue to be taken as “recommended” or even “required”, irrespective of whether the information it provides to creditors is meaningful or useful. They would add that there is a need, as identified by Professor Kempson, for IPs to focus on the narrative explanation they provide, rather than the automated completion of a matrix. At the very least, conceptually it would seem fair to say that there is a tension between providing a “suggested” format as an appendix to a document that is otherwise mandatory.

But as our recent survey has shown, IPA members have been quite clear about what they want. At a recent PGES meeting, one senior compliance manager made the point that whilst the narrative

may be the most important aspect in properly explaining fees, or proposed fees, to those effectively paying them, the narrative still needs to be providing an explanation of some actual numbers, which will generally be more clearly presented in a tabulated form.

So perhaps one alternative might be for the current appendix to be retained in the form of an Insolvency Guidance Paper? In doing so, the mandatory principles and expected standards can keep their principles focus and emphasise the importance of the narrative elements, whilst practitioners will receive the guidance they seek about the format. And creditors will retain some level of consistency (albeit that views amongst the creditor community appear mixed about whether they want consistency of presentation).

Ultimately, with the introduction of regulatory objectives, it seems likely that there will be a shift in regulatory focus towards the qualitative assessment of the narrative explanations provided by

Alison Curry, Head of Regulatory Standards, IPA

Investigation Committee Rules 4.1/4.2 Rule 4.1: The Committee shall have power by Notice served on the Relevant Person to call for and it shall be the duty of every Relevant Person to provide and if so requested by the Committee to use best endeavours to procure that any third party stipulated by the Committee shall provide within such time as may reasonably be prescribed by the Committee, such further information including books, papers and records, as the Committee considers necessary, to enable it to decide whether or not there is a prima facie case against the Relevant Person. Every such Relevant Person shall also, if so requested by the Committee, provide access where possible to premises at which any such books, papers and records may be kept.

Rule 4.2: Where a request is made under 4.1 and the Relevant Person fails to comply with any such request within the time prescribed by the Committee, such failure may be treated as a Complaint under Rule 2.2.

practitioners, rather than the objective accuracy of the numerical information and their adherence to due process. This has been seen already in the context of SIP 16. Conversely, creditors may need to accept that writing a report from scratch to avoid repetitious, standard paragraphs being cut and pasted from previous reports will involve more time, and therefore, cost. It seems only logical that a bespoke product will always be more expensive than a generic one; a matter to which many personal insolvency practitioners would undoubtedly testify.

BADAS, as it was inevitably going to be known, came into effect on 1 April 2015, to much fanfare from the Scottish Government, and some groaning from the profession. Was yet more change really required? So, what’s happened in the first few months of the new Act, and what should we as a profession be looking out for further down the line?

At the time of writing, the Accountant in Bankruptcy has just released its statistical analysis of Quarter 1 appointments under the new regime. It is clear, comparing these to the statistics for the preceding Quarter 4, the last under the 2008 statutory regime, that debtors and their advisers voted with their feet and the Accountant in Bankruptcy saw a deluge of debtor applications in that final quarter.

Debtors opted for a short period of aquirenda (the equivalent of after-acquired property) and a three year period of

contribution rather than the increased four (on both counts) and I suspect, in some cases, the flexibility of a contribution set in agreement between the debtor and Trustee, rather than the now compulsory framework of the Common Financial Tool or Statement.

The new Minimal Asset Process (MAP), designed to replace Low Income Low Asset (LILA) as an entry route has been slow to take off, but the Accountant in Bankruptcy is expecting the MAP sequestration process to become more popular in due course. Newly announced UK Government policies on welfare and tax credits may also play a role in an increased uptake.

The requirement for mandatory money advice pre-application and the setting of a Debtor Contribution Order up-front have placed a significant burden onto the money adviser before sequestration is awarded.

Another welcome change is the ability to

Bankruptcy and Debt Advice (Scotland) Act 2014Eileen Maclean, Director of Insolvency Support Services Limited

shorten the first accounting period to six months, effectively reinstating the pre 2008 position. While designed to allow early distributions in cases with significant funds, it will also facilitate a degree of working capital management.

Although the great unknown at the moment is the impact of the changed discharge procedure, which is no longer automatic, and has to be actively applied for by the Trustee. We will need to wait and see what the practical implications of these changes are, one year from now.

And dare I say it, there would appear to have been a missed opportunity. There has been no wholesale consultation on the role of the debtor’s family home in sequestration, or an attempt to straighten out the exemption provisions for the debtor’s dwelling house in protected trust deeds. Next time perhaps?

A recent High Court decision (James Green v James Wright [2015] EWHC 993 (Ch)) may have an impact on how PPI refunds, and any other unrealised arrangement assets, are dealt with in completed IVA cases.

Following closure of an IVA, it was discovered that the individual had funds owing to him as a result of a PPI claim. The funds were paid to the former Supervisor as they were considered to be assets comprised within the IVA which should be utilised for the benefit of creditors. The voluntary arrangement proposal contained an “all assets” clause and utilised the R3 Standard Conditions V2. It was not disputed that the PPI monies would have been an asset of the arrangement if realised prior to its conclusion.

The Court was asked to consider the effect of the issuing of a completion certificate on the availability of a PPI claim to the arrangement. In this instance the Court ordered that the proceeds of the PPI claims were due and payable to the debtor, as the issuing of a completion statement had brought any continuing trust over them to an end (in contrast to the situation where an arrangement had been terminated, rather than completed successfully, where a trust may have continued, depending upon the terms of the arrangement).

The clauses relating to the effect of issuing a completion statement in both the R3 and IVA Protocol Conditions are written in identical terms and state that the debtor shall be released from all debts which are subject to the arrangement. As previously noted in the January 2012 “Further Guidance on Paymex”, where creditors had received all that they could have expected from an arrangement, there can be no continuing trust for their benefit as a trust must

PPI claims in completed IVAshave beneficiaries in order for it to survive. It was held in the Green v Wright judgement that there were no beneficiaries, given that creditors’ claims had been discharged, and therefore, there was no continuing trust. The funds would, therefore, be held on a bare trust for the debtor.

In this case, the proposal was silent on whether a trust continued after completion of the arrangement and there was no express agreement reached with the debtor in advance of issuing the completion statement, as suggested by paragraph 4.2 of the PPI Guidance. Both the PPI Guidance and the absence of an express agreement were referred to by the Court in reaching its decision.

The case is to be appealed to the Court of Appeal, and consequently, it is too early to give definitive guidance on how IPs should react to this judgement. Practitioners should note that the current PPI Guidance is under review and issues raised by this decision will be considered as part of that process. In the meantime, where the intention is to realise assets after the conclusion of an arrangement, Practitioners may wish to obtain legal advice as to the precise terms of any agreement they propose to reach with a debtor, and the wording of the completion statement.

The judgement also reinforces the need for a clear and early dialogue with debtors about any potential PPI claims, and the impact pursuing them might have on the expected duration of their IVAs, with reference to the specific terms of their IVA proposals. Doing so may help practitioners to manage their clients’ expectations and avoid unnecessary complaints.

2015 continues to be a busy period for the Secretariat’s regulation department. Common themes and other issues arising from complaints referred to the Investigation Committee (IC/the Committee) are as follows:

SIPsSIP3/3a: There continues to be a number of findings in respect of poor initial advice being provided to debtors, poorly drafted proposals and modifications which have resulted in misinterpretations by either a debtor or a member, inadequate verification work carried out and failure to ensure a debtor’s assets have been secured in line with the terms of an individual voluntary arrangement or trust deed. Some of these findings could have been avoided had there been better quality control procedures in place.

SIP9: Prima facie findings have been made where members have failed to comply with the SIP9 resulting in unauthorised drawing of

disbursements and remuneration. Members should be aware that where the Membership and Authorisation Committee (M&A) refers unapproved remuneration drawn to IC if identified on inspection visits, prima facie findings invariably follow. The IC looks more favourably on those members where the matter has clearly been the result of an administrative error, the member admits the error, immediately repays the unauthorised amount to the estate, attempts to obtain proper authorisation and implements procedures to prevent recurrence of the error. Members are also reminded that IC may scrutinise fees drawn where it considers disclosures to creditors lack transparency.

SIP16: All recent SIP16 complaint findings have been on complaints raised by the Insolvency Service for poor SIP16 compliance. The Committee would stress to members that they must ensure their disclosures are issued in a timely manner

Regulatory themes arising from complaints received by the SecretariatJas Chauhan, Regulation Officer

and comply fully with the spirit as well as the detail of SIP16. A number of the complaints resulted from members failing to provide creditors with sufficient background and financial information regarding the circumstances leading to the pre-packaged administration, the statutory purpose of the administration, full details of assets [or reasons why these cannot be disclosed to creditors] and confirmation of the asset valuer’s qualifications and independence. On the plus side, SIP16 complaints have reduced. Nonetheless, there remains an industry-wide focus on SIP16 and pre-packaged sales.

Fundamental Principles of the Ethics CodeA number of misconduct findings have been made against members falling short of the fundamental principles of professional competence and due care, professional behaviour, integrity and objectivity. Actions which gave rise to these findings include accepting inappropriate (or potentially inappropriate) appointments which may bring the insolvency profession into disrepute, mishandling the sale of assets, failure to seek the appropriate sanction prior to entering into a compromise agreement, lack of clarity and transparency in communications, poor handling of press

DISCIPLINARY CONSENT ORDER 19 May 2015PURSUANT TO RULE 5 OF THE IPA INVESTIGATION COMMITTEE RULES Frank A Hatch, of Dudley, England a former IPA Member and Licensed Insolvency Practitioner.

This Order is made in relation to a complaint from the IPA Secretariat that Mr Hatch failed to provide information formally required pursuant to the Investigation Committee Rule 4.1 Notice issued on 3 November 2014. The information was required in order to progress a separate complaint investigation. Accordingly Mr Hatch was found liable to disciplinary action under the IPA’s Articles of Association.

The sanction reflects the decision that the complaint is aggravated by Mr Hatch’s repeated failure to respond in a timely manner or at all to letters, telephone calls and emails. The Investigation Committee decided to impose a disciplinary order that Mr Hatch be reprimanded, pay a fine of £1,500 and make a contribution to costs.

Regulatory themes arising from complaints received by the Secretariat (Continued)

DISCIPLINARY CONSENT ORDER 19 May 2015PURSUANT TO RULE 5 OF THE IPA INVESTIGATION COMMITTEE RULES Michael Howorth, of Accrington, England an IPA member and Licensed Insolvency Practitioner.

This order is made in relation to a complaint from a debtor that in his role as Supervisor, Mr Howorth failed to address creditors’ claims in a timely manner as a result of which the completion of the individual voluntary arrangement was significantly delayed. Accordingly Mr Howorth was found liable to disciplinary action under the IPA’s Articles of Association.

The sanction reflects the decision that the complaint is aggravated by Mr Howorth’s repeated conduct for which there had been an earlier finding against him. The Investigation Committee decided to impose a disciplinary order that Mr Howorth be reprimanded, pay a fine of £1,000 and make a contribution to costs.

Eileen Maclean

CVL FeesThere has been some concern and speculation amongst IPs about how the new provisions for fee estimates will work in the context of CVL cases. It is understood that the Insolvency Service will be issuing a Dear IP to clarify this, amongst a number of other matters. The draft SIP 9 reflects the position as we understand it, that a prospective liquidator is not precluded from providing a fee estimate to creditors.

insolvencypractitioner

September 2015www.insolvency-practitioners.org.uk

On 27 July, the RPBs collectively issued the latest iteration of SIP 9 in draft form, for Public Consultation. Whilst the timing of the consultation is accepted as less than ideal (given the holiday period), even with a truncated consultation period, it seems unlikely that a new SIP will be issued concurrently with the commencement of the Insolvency (Amendment) Rules 2015 on 1 October.

The consultation closes on 4 September 2015. The JIC working group will then need to collate and review the responses it has received from the profession and other stakeholders and refer a revised draft back to JIC when it meets later in the month. The revised SIP will then need to go through the various RPBs’ approval processes. In the case of the IPA, that means consideration by its Practice Guidance, Ethics and Standards Committee (PGES), followed by a recommendation from them to IPA Council as to whether the SIP should be issued. Other RPBs have their own processes and committee structures, the timing of which may impact on issuing the new SIP. The present timetable envisages issue of the new SIP on 1 November 2015, though in

light of the above, this appears ambitious unless there is some early unanimity of agreement about its contents.

The principles-based approach of the current draft has met with mixed responses from IPA members. This approach provides for the current appendix (Suggested Format for the Provision of Information) being removed from it. At the IPA Annual Conference in April, delegates were asked to vote on whether they considered the SIP should continue to provide a suggested format or template, for the provision of time costs information (and fee estimates, as will be required under the new Rules). Further votes were taken at our Regional Roadshows during June and recently a survey of members was conducted to establish if this was the more widely held view amongst members. In all instances, there was overwhelming support for a suggested format to continue to be provided, though rather more mixed views about whether this necessarily needs to be as an appendix to the SIP itself. The IPA will use these results to inform its own response to the Public Consultation upon its members’ behalf.

5 6

IPA NEWSThe Insolvency Rules 2016 The Insolvency Service recently published the latest draft of the Insolvency Rules 2016. These are now with the Insolvency Rules Committee, whose role is to review the changes to rules before reporting to the Lord Chancellor. Subject to this work, it is anticipated that the Rules will be made in Spring 2016, with a commencement date of 1 October 2016.

Refresher on Regulation – SOLD OUT The IPA recently hosted a small group of its practitioners for a one-day class-room style refresher course on the requirements of the Ethics Codes, SIPs and IGPs. Feedback was excellent and the repeat events planned for September and November are fully booked. Due to demand, further events are planned for February and March in London, Liverpool and Manchester. Contact joannb@ipa.uk.com if you would like to register your interest in attending a future event.

Annual DinnerThe IPA Annual Dinner will be held at the Royal Institute of British Architects on 24 September 2015. Previous years’ dinners have proved to be highly successful and have created an excellent ambience in which to discuss topics of the day with your colleagues and peers. If you would like to attend the Annual Dinner this year please email events@ipa.uk.com.

Regional RoadshowsAutumn Programme100% rate quality of content of Spring programme as “good” or “excellent”

The IPA’s popular Regional Roadshow programme will continue on 1 October 2015 with a visit to Birmingham. Further events will be held in Belfast on 14 October 2015 and conclude in London on 4 November 2015. Excellent delegate feedback from the Spring programme saw delegates in Leeds, Manchester and Bristol overwhelmingly rate these events as “good value for money” (96%).

The IPA’s Regional Roadshows are part of our continuing commitment to provide our members with high quality and affordable CPE, at a time when we appreciate training budgets are stretched. With the implementation of the Insolvency (Amendment) Rules 2015 on 1 October 2015, and new SIPs 1, 16, and 9 in the pipeline, there will certainly be plenty to consider and discuss. Prices start from only £100 +VAT. To book your place visit our website or contact: events@ipa.uk.com

SIP 9 Consultation – IPA Members have their say

Forthcoming Events

2015

The Non-Administrative Receivers Association (NARA) was formed in 1995 by a group of professionals from property, legal, and insolvency backgrounds, to promote professional standards and provide training for Fixed Charge Receivers and LPA Receivers. However, NARA has always been a professional trade body (akin to R3), rather than a regulatory body, such as the IPA or RICS.

On 1 June 1999, the Fixed Charge Receivers’ Scheme was established as a joint initiative between the Royal Institute of Chartered Surveyors (RICS), the Insolvency Practitioners Association (IPA), and ACCA in collaboration with NARA. Scheme members are able to call themselves “Registered Property Receivers” (RPRs); a designation which is becoming increasingly recognised by banks and other appointers as a mark that can be trusted. There is currently no statutory requirement for fixed charge and LPA receivers to be regulated, however, this voluntary scheme seeks to improve trust and public confidence.

In 2013, a new Joint Regulatory Committee (JRC) was formed by RICS and IPA to oversee the scheme’s operations. To ensure public confidence in its independence, JRC is comprised mainly of lay members, a lay chairperson and has only 2 practitioner representatives from RICS and the IPA. The new committee is extremely pro-active and has been essential in driving the scheme forward.

To ensure RPRs reach and maintain the expected standards of professional practice, admission to the scheme is via application and involves applicants meeting qualification, peer interview and experience requirements. The RPR examinations are held annually and are administered by the IPA. Examination papers are written by experienced RPRs, such as myself. Qualified insolvency professionals (i.e. holders of the Joint Insolvency Examination) are exempt from sitting the examination, although the peer interview and experience requirements apply to all.

Whist scheme membership is voluntary,

I would actively encourage Insolvency Practitioners to consider membership, if they are seeking fixed charge or LPA receivership appointments. For further information on joining the scheme, visit the IPA website or contact membership@ipa.uk.com.

9 September 2015 All Day Practical Insolvency Course London

24 September 2015 Evening Annual Dinner London

1 October 2015 Morning Regional Roadshow Birmingham

14 October 2015 Morning Regional Roadshow Belfast

2 November 2015 Morning JIEB Liquidation Exam Various

3 November 2015 Morning JIEB ACVAR Exam Various

4 November 2015 Morning JIEB Personal Insolvency Exam Various

4 November 2015 Morning Regional Roadshow London

3 December 2015 All day Personal Insolvency Conference Manchester

4 December 2015 Morning CPI/CPPI Exams [TBC] Various

28 January 2016 Evening IPA Annual Lecture London

Fixed Charge Receivership Scheme for registered property receiversBy Nick Hancock, Partner, UHY Hacker Young

JIEB 2014 First Prize winner

This is the second edition of this book, 6 years after the first edition. The authors are both partners in the property group at Charles Russell Speechlys solicitors.

As you would expect from a book published by Jordan Publishing, it provides a full account of the modern law relating to property insolvency. At 444 pages long, it is a comprehensive guide to both formal and informal property insolvency and covers everything from the Statute of Marlborough 1267 to the introduction of Commercial Rent Arrears Recovery in 2014.

At the start of the book is a foreword

BOOK REVIEW: Property InsolvencyBy Peter Levaggi and Roger Elford

Robert Pick, Director, Menzies

from Peter Arden QC of Erskine Chambers who neatly summarises the significant changes that have taken place in the property sector since the first edition was published.

After a short introduction and overview of insolvency the book is split in to 5 parts: the tenant’s insolvency; freeholder/landlord insolvency; mortgagees and receivers; property assets and personal insolvency and property taxation and insolvency. I particularly found useful the sections dealing with the evolution of the administration expenses regime and the use of Company Voluntary Arrangements particularly in relation to multi-site retailers.

The book is aimed at lawyers, property and insolvency professionals. Clearly this is a “must have” book for those who are involved in this specialist area. I would also strongly recommend this book for students taking the RPR exam. For those readers that do not want to carry around the book with them, there is also the convenience of a CD inside the back cover.

About the authorNick Hancock is a dedicated insolvency and corporate recovery partner at UHY Hacker Young. He is used to handling a large variety of situations, in particular property investment and construction related businesses. Nick became a member of the Registered Property Receivers’ Scheme after being extremely active and successful in the property sector.

Nick Hancock

David Kerr, IPA CEO, presented Russel Simpson of Grant Thornton his prize for being the overall JIEB 2014 First Prize winner at an awards ceremony held on 19 June at the BMA, Tavistock Square.

Russel, an IPA member, has been invited to collect a further prize for being the highest marked IPA candidate at our Annual Dinner on 24 September 2015.

Richard Turton had a unique role in the formation and management of INSOL Europe, INSOL International, The Insolvency Practitioners Association and R3, the Association of Business Recovery Professionals in the UK. In recognition of his achievements the four organisations jointly created an award in his memory. The Richard Turton Award is an annual award providing an educational opportunity for a qualifying participant to attend the annual INSOL Europe Conference and have a technical paper published.

Applications for the award were invited to write a statement detailing why they should be chosen in less than 200 words. A panel representing the four associations adjudicated the applications. There were many excellent submissions and the judges task was very difficult this year. The Committee is delighted to announce that the winner is Waiswa Abudu Sallam

from Uganda. Waiswa works for the Uganda Revenue Authority in the Debt Collection Department.

Waiswa is currently studying for a Master of Laws in Corporate and Insolvency Law at Nottingham Trent University, UK (by distance learning). This is the first time we have had a winner from Uganda. As part of the award, Waiswa is invited to attend the INSOL Europe Conference which will be held on the 1-4 October in Berlin, Germany. He will be writing a paper that will be published in summary in one or more of the Member Associations’ journals and in full on their websites.

Richard Turton Award 2015

Waiswa Abudu Sallam, winner of the Richard Turton Award 2015

insolvencypractitioner

September 2015www.insolvency-practitioners.org.uk

Laura Bullock CPI 1st place E&W Rimes & Co Ltd

Aiste Best CPI 2nd place E&W Saud & Company Ltd

Kirsty Irving CPPI 1st place E&W Stepchange Debt Charity

Sian Jones CPCI 1st place E&W EY

David Bonthrone CPI 1st place Scotland KPMG LLP

Paul Yates CPPI 1st place Scotland Gregory Pennington Ltd

CPI/CPPI/CPCI Prize Winners June 2015

insolvencypractitioner

September 2015www.insolvency-practitioners.org.uk

On 27 July, the RPBs collectively issued the latest iteration of SIP 9 in draft form, for Public Consultation. Whilst the timing of the consultation is accepted as less than ideal (given the holiday period), even with a truncated consultation period, it seems unlikely that a new SIP will be issued concurrently with the commencement of the Insolvency (Amendment) Rules 2015 on 1 October.

The consultation closes on 4 September 2015. The JIC working group will then need to collate and review the responses it has received from the profession and other stakeholders and refer a revised draft back to JIC when it meets later in the month. The revised SIP will then need to go through the various RPBs’ approval processes. In the case of the IPA, that means consideration by its Practice Guidance, Ethics and Standards Committee (PGES), followed by a recommendation from them to IPA Council as to whether the SIP should be issued. Other RPBs have their own processes and committee structures, the timing of which may impact on issuing the new SIP. The present timetable envisages issue of the new SIP on 1 November 2015, though in

light of the above, this appears ambitious unless there is some early unanimity of agreement about its contents.

The principles-based approach of the current draft has met with mixed responses from IPA members. This approach provides for the current appendix (Suggested Format for the Provision of Information) being removed from it. At the IPA Annual Conference in April, delegates were asked to vote on whether they considered the SIP should continue to provide a suggested format or template, for the provision of time costs information (and fee estimates, as will be required under the new Rules). Further votes were taken at our Regional Roadshows during June and recently a survey of members was conducted to establish if this was the more widely held view amongst members. In all instances, there was overwhelming support for a suggested format to continue to be provided, though rather more mixed views about whether this necessarily needs to be as an appendix to the SIP itself. The IPA will use these results to inform its own response to the Public Consultation upon its members’ behalf.

5 6

IPA NEWSThe Insolvency Rules 2016 The Insolvency Service recently published the latest draft of the Insolvency Rules 2016. These are now with the Insolvency Rules Committee, whose role is to review the changes to rules before reporting to the Lord Chancellor. Subject to this work, it is anticipated that the Rules will be made in Spring 2016, with a commencement date of 1 October 2016.

Refresher on Regulation – SOLD OUT The IPA recently hosted a small group of its practitioners for a one-day class-room style refresher course on the requirements of the Ethics Codes, SIPs and IGPs. Feedback was excellent and the repeat events planned for September and November are fully booked. Due to demand, further events are planned for February and March in London, Liverpool and Manchester. Contact joannb@ipa.uk.com if you would like to register your interest in attending a future event.

Annual DinnerThe IPA Annual Dinner will be held at the Royal Institute of British Architects on 24 September 2015. Previous years’ dinners have proved to be highly successful and have created an excellent ambience in which to discuss topics of the day with your colleagues and peers. If you would like to attend the Annual Dinner this year please email events@ipa.uk.com.

Regional RoadshowsAutumn Programme100% rate quality of content of Spring programme as “good” or “excellent”

The IPA’s popular Regional Roadshow programme will continue on 1 October 2015 with a visit to Birmingham. Further events will be held in Belfast on 14 October 2015 and conclude in London on 4 November 2015. Excellent delegate feedback from the Spring programme saw delegates in Leeds, Manchester and Bristol overwhelmingly rate these events as “good value for money” (96%).

The IPA’s Regional Roadshows are part of our continuing commitment to provide our members with high quality and affordable CPE, at a time when we appreciate training budgets are stretched. With the implementation of the Insolvency (Amendment) Rules 2015 on 1 October 2015, and new SIPs 1, 16, and 9 in the pipeline, there will certainly be plenty to consider and discuss. Prices start from only £100 +VAT. To book your place visit our website or contact: events@ipa.uk.com

SIP 9 Consultation – IPA Members have their say

Forthcoming Events

2015

The Non-Administrative Receivers Association (NARA) was formed in 1995 by a group of professionals from property, legal, and insolvency backgrounds, to promote professional standards and provide training for Fixed Charge Receivers and LPA Receivers. However, NARA has always been a professional trade body (akin to R3), rather than a regulatory body, such as the IPA or RICS.

On 1 June 1999, the Fixed Charge Receivers’ Scheme was established as a joint initiative between the Royal Institute of Chartered Surveyors (RICS), the Insolvency Practitioners Association (IPA), and ACCA in collaboration with NARA. Scheme members are able to call themselves “Registered Property Receivers” (RPRs); a designation which is becoming increasingly recognised by banks and other appointers as a mark that can be trusted. There is currently no statutory requirement for fixed charge and LPA receivers to be regulated, however, this voluntary scheme seeks to improve trust and public confidence.

In 2013, a new Joint Regulatory Committee (JRC) was formed by RICS and IPA to oversee the scheme’s operations. To ensure public confidence in its independence, JRC is comprised mainly of lay members, a lay chairperson and has only 2 practitioner representatives from RICS and the IPA. The new committee is extremely pro-active and has been essential in driving the scheme forward.

To ensure RPRs reach and maintain the expected standards of professional practice, admission to the scheme is via application and involves applicants meeting qualification, peer interview and experience requirements. The RPR examinations are held annually and are administered by the IPA. Examination papers are written by experienced RPRs, such as myself. Qualified insolvency professionals (i.e. holders of the Joint Insolvency Examination) are exempt from sitting the examination, although the peer interview and experience requirements apply to all.

Whist scheme membership is voluntary,

I would actively encourage Insolvency Practitioners to consider membership, if they are seeking fixed charge or LPA receivership appointments. For further information on joining the scheme, visit the IPA website or contact membership@ipa.uk.com.

9 September 2015 All Day Practical Insolvency Course London

24 September 2015 Evening Annual Dinner London

1 October 2015 Morning Regional Roadshow Birmingham

14 October 2015 Morning Regional Roadshow Belfast

2 November 2015 Morning JIEB Liquidation Exam Various

3 November 2015 Morning JIEB ACVAR Exam Various

4 November 2015 Morning JIEB Personal Insolvency Exam Various

4 November 2015 Morning Regional Roadshow London

3 December 2015 All day Personal Insolvency Conference Manchester

4 December 2015 Morning CPI/CPPI Exams [TBC] Various

28 January 2016 Evening IPA Annual Lecture London

Fixed Charge Receivership Scheme for registered property receiversBy Nick Hancock, Partner, UHY Hacker Young

JIEB 2014 First Prize winner

This is the second edition of this book, 6 years after the first edition. The authors are both partners in the property group at Charles Russell Speechlys solicitors.

As you would expect from a book published by Jordan Publishing, it provides a full account of the modern law relating to property insolvency. At 444 pages long, it is a comprehensive guide to both formal and informal property insolvency and covers everything from the Statute of Marlborough 1267 to the introduction of Commercial Rent Arrears Recovery in 2014.

At the start of the book is a foreword

BOOK REVIEW: Property InsolvencyBy Peter Levaggi and Roger Elford

Robert Pick, Director, Menzies

from Peter Arden QC of Erskine Chambers who neatly summarises the significant changes that have taken place in the property sector since the first edition was published.

After a short introduction and overview of insolvency the book is split in to 5 parts: the tenant’s insolvency; freeholder/landlord insolvency; mortgagees and receivers; property assets and personal insolvency and property taxation and insolvency. I particularly found useful the sections dealing with the evolution of the administration expenses regime and the use of Company Voluntary Arrangements particularly in relation to multi-site retailers.

The book is aimed at lawyers, property and insolvency professionals. Clearly this is a “must have” book for those who are involved in this specialist area. I would also strongly recommend this book for students taking the RPR exam. For those readers that do not want to carry around the book with them, there is also the convenience of a CD inside the back cover.

About the authorNick Hancock is a dedicated insolvency and corporate recovery partner at UHY Hacker Young. He is used to handling a large variety of situations, in particular property investment and construction related businesses. Nick became a member of the Registered Property Receivers’ Scheme after being extremely active and successful in the property sector.

Nick Hancock

David Kerr, IPA CEO, presented Russel Simpson of Grant Thornton his prize for being the overall JIEB 2014 First Prize winner at an awards ceremony held on 19 June at the BMA, Tavistock Square.

Russel, an IPA member, has been invited to collect a further prize for being the highest marked IPA candidate at our Annual Dinner on 24 September 2015.

Richard Turton had a unique role in the formation and management of INSOL Europe, INSOL International, The Insolvency Practitioners Association and R3, the Association of Business Recovery Professionals in the UK. In recognition of his achievements the four organisations jointly created an award in his memory. The Richard Turton Award is an annual award providing an educational opportunity for a qualifying participant to attend the annual INSOL Europe Conference and have a technical paper published.

Applications for the award were invited to write a statement detailing why they should be chosen in less than 200 words. A panel representing the four associations adjudicated the applications. There were many excellent submissions and the judges task was very difficult this year. The Committee is delighted to announce that the winner is Waiswa Abudu Sallam

from Uganda. Waiswa works for the Uganda Revenue Authority in the Debt Collection Department.

Waiswa is currently studying for a Master of Laws in Corporate and Insolvency Law at Nottingham Trent University, UK (by distance learning). This is the first time we have had a winner from Uganda. As part of the award, Waiswa is invited to attend the INSOL Europe Conference which will be held on the 1-4 October in Berlin, Germany. He will be writing a paper that will be published in summary in one or more of the Member Associations’ journals and in full on their websites.

Richard Turton Award 2015

Waiswa Abudu Sallam, winner of the Richard Turton Award 2015

insolvencypractitioner

September 2015www.insolvency-practitioners.org.uk

Laura Bullock CPI 1st place E&W Rimes & Co Ltd

Aiste Best CPI 2nd place E&W Saud & Company Ltd

Kirsty Irving CPPI 1st place E&W Stepchange Debt Charity

Sian Jones CPCI 1st place E&W EY

David Bonthrone CPI 1st place Scotland KPMG LLP

Paul Yates CPPI 1st place Scotland Gregory Pennington Ltd

CPI/CPPI/CPCI Prize Winners June 2015