The new Insolvency (England and Wales) Rules 2016 (SI 2016/1024) came into force on April 6, 2017 (the 2016 Rules). The 2016 Rules replace the Insolvency Rules 1986 (SI 1986/1925) and their 28 subsequent amendments (the 1986 Rules) and represent a continuation of the Insolvency Service’s recent efforts to modernize and implement policy changes under various pieces of primary legislation. The 2016 Rules only apply in England and Wales and a parallel project to modernize the Scottish insolvency rules is currently underway.
The 2016 Rules aim to reflect modern business practice and make the insolvency process more efficient, streamlined and cost-effective. A key aspect of the changes is to enable modern methods of communication and decision making to be used in lieu of paper communications and physical meetings.
Key changes include:
- Abolition of statutory forms
- Removal of automatic requirement to hold physical creditor meetings
- Emphasis on electronic communication including the use of websites and emails
- An opt-out for ongoing correspondence
- New “deemed consent” procedure
Generally, the 2016 Rules will apply to all insolvency cases, whether they commence before or after April 6, 2017. However, certain transitional provisions preserve the position under the 1986 Rules in relation to certain procedures or activities which may be completed after April 5, 2017.
Key transitional provisions include:
- Ongoing court applications will continue under the 1986 Rules
- Meetings called before April 6, 2017 will take place under the 1986 Rules