Lindsays Dispute Resolution and Litigation article
New Scottish Insolvency Rules now in force
Iain Penman, a Director in Lindsays’ Dispute Resolution and Litigation team comments that recent changes to Insolvency law have important implications for both solicitors and Insolvency Practitioners
The new Insolvency Rules bring the first significant changes to the sector for over 30 years and although positive, they do require particular consideration by those working in this area.
Developments
6 April 2019 brought significant changes to corporate insolvency procedures. The most notable change is that the Rules have been moved from previously being contained in one set of rules to now two – with the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018 and the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 coming in to force.
The 2018 Rules are intended to consolidate and update the legal position on corporate insolvency in Scotland. They are broadly in line with the Insolvency (Scotland) Rules 1986, with the principal focus being an intention to modernise the procedures and language to make the rules easier to use.
The changes aim to bring the system in Scotland in line with the equivalent in operation in England and Wales under the Insolvency (England and Wales) Rules 2016 and will hopefully make it easier for those dealing with cross border insolvencies.
What are the changes?
The most significant of the changes include clarity concerning time periods and delivery requirements, the use of electronic communication with creditors, standardising procedures across different regimes such as creditor claims, introducing deemed decision procedures and virtual creditor meetings.
It is also important to note that there are transitional provisions which will mean that the 2018 Rules will apply generally to existing cases as well as new cases on or after 6 April 2019. It is therefore critical to be fully ready to tackle the incoming changes.
The practical implications
This is a very brief overview of the substantial changes now in force. It is important that those working in corporate insolvency are aware of the impact these rules will have in order to ensure compliance with statutory obligations.
Forms, template letters and other documents need to be compliant with the new rules and insolvency practitioners will need to be careful with regard to the transitional arrangements in the coming weeks.
If you would like more information or to talk to a Restructuring and Insolvency expert, please contact Iain Penman, Director in our Dispute Resolution and Litigation team.
Partner, Solicitor Advocate
