Temporary Insolvency Practice Direction

April 6, 2020

Temporary Insolvency Practice Direction

A Temporary Insolvency Practice Direction (“TIPD”) drafted by Mr Justice Zacaroli, Chief ICCJ Briggs, Mr Justice Snowden and Mr Justice Marcus Smith came into force on 6 April 2020 and will remain in force until 1 October 2020 unless amended or revoked.

TIPD can be found at https://www.judiciary.uk/wp-content/uploads/2020/04/Temporary-IPD-April-2020_.pdf

Its purpose is to assist court users during the COVID-19 pandemic by avoiding the need to attend court in person, and mitigating some of the problems arising from the court operating with reduced staff and resources.

TIPD applies to insolvency proceedings in the Business and Property Courts, subject to variations on circuit directed by the relevant supervising Judge. Specifically, it applies to:

  • Notices of intention to appoint (“NOIs”) filed by a company or its directors.
  • Notices of appointment of an administrator (“NOAs”) filed by a company or its directors.
  • NOAs filed by a qualifying floating charge holder (“QFCH”).

TIPD has 9 paragraphs.

Paragraph 1 sets out definitions.

Paragraph 2 sets out its application and coming into force.

Paragraph 3 concerns filing a notice of intention to appoint an administrator and a notice of appointment of an administrator. Points to note are:

  • NOIs and NOAs to which TIPD applies and filed through CE-file are treated as delivered to the court at the time and date recorded in the filing submission email (para. 3.1). Note it is still not settled as to what time and date to include on the notice of the appointment itself, but see Re Spaces London Bridge Limited [2018] EWHC 3099 (Ch) for a recent authority. There is some debate concerning this omission.
  • TIPD does not apply to a NOI filed by a QFCH (para. 3.2).
  • A NOI e-filed by a company or its directors outside the hours of 10.00 am and 4.00 pm is treated as filed at 10.00 am on the next day that the court is open for business (para. 3.3). Note the TIPD defines the start of the ten-business-day period by its date but does not specify the time when the period starts running. Recent authority suggests that the day of filing is included in the ten-business day period (Re Statebourne Cryogenic Limited [2020] EWHC 231 (Ch)). Note also that courts on circuit can vary these hours.
  • A NOA e-filed by a company or its directors outside the hours of 10.00am and 4.00pm is treated as filed at 10.00 am on the next day that the court is open for business (para. 3.4). Note also that courts on circuit can vary these hours.
  • The normal process by which court staff will review CR-filed documents still applies to NOIs and NOAs. Staff retain the ability to reject such documents for other reasons, but the delay in formal acceptance of an NOA will not effect its validity (para. 3.5).
  • QFCHs cannot e-file NOAs outside court hours but must use the fax and email process in the Insolvency Rules (England and Wales) Rules 2016 (para. 3.6).

Paragraph 4 concerns the adjournment of pending applications and petitions.

  • The vast majority of petitions and claims currently listed for hearing before 21 April 2020 are adjourned.

Paragraph 5 concerns urgent hearings before a High Court Judge or an ICC Judge. Points to note are:

  • There is a specific process to re-list urgent matters, which engages the relevant judge’s clerk (para. 5.1).
  • The clerk or the judge will then consider how to proceed (para. 5.2).
  • On 7 April 2020, Chief ICC Judge Briggs issued separate guidance setting out what constitutes urgent business for hearings in the Rolls Building. These include:
    • Applications made pursuant to s. 17 Company Directors’ Disqualification Act 1986
    • Applications made pursuant to s. 216 of the Insolvency Act 1986
    • Public interest winding up petitions
    • Applications to convene a meeting for a members’ scheme of arrangement
    • Capital reduction claims
    • Cross-border merger claims.
  • Note that the circuits may (and some have) issued their own guidance.

Paragraph 6 concerns remote hearings. Points to note are:

  • Hearings will be conducted through Skype for Business or other remote hearing technology.
  • The Judge retains the discretion to adjourn hearings once they have commenced.

Paragraph 7 concerns the temporary listing procedure for winding-up and bankruptcy petitions

  • A temporary listing procedure is in operation for winding-up petitions and bankruptcy petitions to be heard before an ICC Judge in the Rolls Building.
  • Time slots are allocated for groups of 2 or more petitions, with a designated link to video conferencing technology which are published on the daily cause list (para. 7.2).
  • Alternative arrangements can be made if the link cannot be used (para. 7.3).
  • Any person intending to appear must deliver a notice of intention to appear in accordance with Rule 7.14 and provide an email address or telephone number (para. 7.4).

Paragraph 8 concerns other insolvency hearings. Points to note are:

  • The court will propose either video or telephone conferencing facilities to the parties (para. 8.1.).
  • The parties may disagree with the proposal by making submissions by email of CE-file, copied to the other parties, making alternative proposals, following which the judge will make a determination (para. 8.2).
  • The court may list a short remote CMC in advance of the fixed hearing to allow for directions to be made for the conduct of the hearing and other relevant matters (para. 8.3).

Paragraph 9 concerns statutory declarations:

  • Statutory declarations made otherwise than in-person may constitute an irregularity or formal defect, but pursuant to Rule 12.64, it is possible for the court, following objection, to declare that any irregularity or formal defect does not invalidate the proceedings, unless substantial injustice has been caused by the defect or irregularity which cannot be remedied by any order of the court (para. 9.1).
  • A statutory declaration made otherwise than in person shall not be considered an irregularity or formal defect if done by way of video conference, the person authorised to administer the oath attests as such, and the statutory declaration states as such (para. 9.2).
  • Note that there is ambiguity as to whether paragraph 9 only applies to NOIs and NOAs or whether it also applies to an MVL.

Please contact us if you require assistance with the new TIPD or any personal or corporate insolvency matter.

Justin Perring

 

jperring@pallantchambers.co.uk

 

Tags: Insolvency

 

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Commercial, Employment, Family, General Civil, Insolvency, Property and Planning, Will Disputes