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Update of Insolvency Legislation

08/04/2010

The law relating to insolvency, is based on statute and rules introduced back in 1986. The law has been updated a number of times since 1986.

On 6th April 2010, the Insolvency (Amendment) Rules 2010 came into force making further changes. These latest Rules make large amendments to the existing law, in an effort to update the law so as to take into account modern practices and modern technology, including:

• Filing and serving documents by electronic means is now permissible and encouraged.
• Insolvency practitioners now have the option of hosting information about an insolvency on a website, rather than writing to each and every creditor individually.
• Meetings in insolvency matters may now take place without all the parties having to be present at the same venue, for example the meetings taking place by conference call or video link.
• Statements in insolvency proceedings commonly had to be by affidavit, namely a statement sworn before a solicitor or commissioner for oaths. A simple statement of truth will now suffice.

The Insolvency Service estimates the changes will result in savings of approximately £22.4 million per year.

Paul Hatton, a solicitor at KBL Solicitors comments “technology has moved on greatly since the main legislation was introduced in 1986. You only need to look at the Civil Justice Centre in Manchester to see how up to date the legal processes and technologies are. The legislation needed to catch up and the latest amendments will result in more efficient and cost effective insolvency processes, which should ultimately result in more better returns for creditors.”