The existing insolvency rules in the UK have been recast with the aim to "modernize and consolidate" the procedural framework for insolvency processes in the UK and promote efficiency. The Insolvency (England and Wales) Rules 2016 (the “New Rules”) came into force on April 6, 2017.

A key feature of the New Rules is a welcome overhaul of the provisions regarding communication with creditors, to allow for electronic communications instead of paper documents and physical meetings.

Previously, an officeholder could only communicate with a creditor by email where the creditor has given written consent. Under the New Rules, a creditor who communicated with the debtor by email prior to the insolvency proceedings commenced is deemed to have consented to receive documents by email from the officeholder (unless such consent is revoked).

The New Rules also change the requirements relating to holding physical meetings of creditors. Going forwards, in most circumstances an officeholder is not required to hold a physical meeting to obtain decisions from creditors. Instead, the officeholder can obtain a decision using a "qualifying decision procedure" or by "deemed consent". We have briefly summarized both these processes below:

  • Qualifying decision procedure: A physical meeting can, generally speaking, only be held if requested by 10 creditors, 10% of creditors by number or 10% of creditors by value. Alternative methods available to an officeholder include organizing a virtual meeting or arranging a decision using qualifying voting.
  • Deemed consent: Where the officeholder gives notice to creditors of a proposed decision for which deemed consent is sought, the decision will be treated as having been made unless 10% (or more) in value of creditors object to it.

Furthermore, creditors are able to opt out of receiving further correspondence from an officeholder, except for notices relating to the payment of dividends or where the rules require notice to all creditors.

The New Rules also greatly facilitate the use of websites to provide creditors with improved access to documentation. Previously a court order was needed before an officeholder had the right to upload any case documents to a website (unless the officeholder also sent a notice to creditors that the relevant documents was available to view on the website). Under the New Rules an officeholder can deliver a notice to every potential recipient of such documents that all future documents (other than documents for which personal delivery is required or that detail an intention to declare a dividend) will be put on a specified website without further separate notice.

The New Rules cover both corporate and personal insolvency proceedings across England and Wales.