28 April 2020
Coronavirus: Impact on Insolvency Proceedings
On 6 April 2020 a new temporary Insolvency Practice Direction (TIPD) came into to force to combat some of the effects of the coronavirus pandemic vis-à-vis the court system and its users. The TIPD is supplemental to the Insolvency Practice Direction of July 2018 and applies to all insolvency proceedings in the Business and Property Courts, save as to any variations that may be directed by judges in relation to matters outside London. It is intended to remain in force until 1 October 2018, subject to any amendments that are likely to follow as the course of the pandemic unfolds, or earlier revocation.
The main provisions of the TIPD relate to the following matters:
1. Filing notice of intention to appoint administrator and notice of appointment of administrator (Paragraph 3)
- In relation to CE-filing, the following Notices (by reference to the provisions of the Insolvency Act 1986) will be deemed delivered at the date and time recorded in the Filing Submission Email:
- Notice of Intention to Appoint an Administrator filed by a company or its directors under Paragraph 27 of Schedule B1;
- Notice of Appointment of an Administrator filed by a qualifying floating charge holder under Paragraph 18 of Schedule B1; and
- Notice of Appointment of an Administrator by a company or its directors under Paragraph 29 of Schedule B1.
- Where a Notice of Intention under Paragraph 27 of Schedule B1 or a Notice of Appointment under Paragraph 29 of Schedule B1 is filed outside the normal court hours of 10am-4pm on a day the court is open for business, it will be treated as delivered to the court at 10am on the next day it is open for business. The relevant moratorium will also start to run at that point.
- A Notice of Appointment filed by a qualifying floating charge holder under Paragraph 14 of Schedule 1 may only be filed by fax or email (in accordance with Rules 3.20-3.22 of the Insolvency Rules 2016).
2. Adjournment and Listing of Insolvency Matters (Paragraphs 4-8)
- All applications, petitions and claim forms which were listed for hearing prior to 21 April 2020 have been adjourned and will be relisted depending on urgency criteria, with the exception of petitions for winding-up and bankruptcy heard before an Insolvency and Companies Court Judge sitting in the Rolls Building in London.
- Where a party considers that an adjourned matter is urgent, it should apply to the court to have it re-listed. Parties are advised to email the ICC Judges’ clerks at ICL.Hearings1@justice.gov.uk , or relevant High Court Judge clerk setting out:
- the nature of the application;
- why it is urgent;
- the estimated time for hearing and pre-reading;
- number of parties who will need to attend; and
- confirmation that the hearing can take place remotely.
- Guidance Notes relating to the above criteria have been issued by Chief ICC Judge Briggs for the ICC in London on 7 April 2020 (attached) and by Mr Justice Snowden for the North and North Eastern Circuits of the B&PC on 6 April 2020 (attached).
3. Statutory Declarations (Paragraph 9)
- The general rule is that where a statutory declaration is made otherwise than in-person before a person authorised to administer the oath may constitute a formal defect or irregularity.
- However, the court may under Rule 12.64 of the Insolvency Rules 2016, declare that any insolvency proceedings to which the declaration relate to will not be invalidated by virtue of the defect or irregularity, unless it causes substantial injustice.
- Following the introduction of social distancing measures, provision has been made in order to swear declarations other than in person, using technology. The following methods for making a statutory declaration will not be deemed to cause ‘substantial injustice’:
- The person making the statutory declaration does so by way of video conference with the person authorised to administer the oath;
- The person authorised to administer the oath attests that the statutory declaration was made in the manner referred to above; and
- The statutory declaration states that it was made in the manner referred to in paragraph above.
The TIPD may be accessed through the following link:
*The Government have announced further changes relating to insolvency proceedings where the debt has arisen as a result of Covid-19 which is discussed here in a Landlord and Tenant context but the changes don't seem to be restricted to unpaid rent. More will be known once the detail of the proposed legislation is released.