Major creditors have indicated that they expect more from insolvency practitioners seeking approval for remuneration than a matrix of hours charged to the case and a narrative of standard tasks. A speaker for an insolvency licence provider said in 2015 that compliance is not a pack of standard letters.
After the noise and concern in 2015 about SIP 16 and the prepack pool, information has started to come forward about what this means in practical, day to day terms.
As regards the prepack pool - and it is of course for the directors of a company in administration, or facing administration, and that is proposing a prepack to submit an application to the prepack pool if they wish - the best comments have been from an insolvency practitioner who told me that 'From our point of view it was dead simple, just a case of sending a standard letter and having a five minute chat with the director submitting the application'. The response from the prepack pool was prompt and did not cause any problems.
Most of the work of an insolvency practitioner cannot be arranged in advance, of course, which leads to the risk that booking insolvency compliance reviews or other compliance projects is put off until that elusive 'moment' or until deadlines are approaching and priorities suddenly change. It is extremely sensible to take advantage of the end of the year to plan the structure of the following year as far as possible.
The Secretary of State will cease issuing insolvency licences from 1 October 2016 and many insolvency practitioners previously licensed by the Secretary of State have already changed to another insolvency licence provider. All insolvency practitioners still licensed by the Secretary of State and who wish to continue taking insolvency appointments must ensure that they have changed to one of the other insolvency licence providers before 1 October 2016 and should allow sufficient time for this process to take place.
The Insolvency (Amendments) Rules 2015 come into effect on 1 October 2015 and bring in the requirements for preparing fees estimates and details of anticipated expenses and sending this information to creditors before the basis of remuneration is approved, either by creditors or a committee.
It will be very important to establish policies to ensure that you are fully compliant with the new rules. Useful, practical advice has been given in Dear IP 65 and Dear IP 68, issued last week, and this should be read, in full, by all members of your insolvency team. Gov UK - dear insolvency practitioner newsletter
It would be a mistake for an insolvency practitioner to think that only an appointment taker working for one of the big four accountancy firms is likely to be affected by the Pensions Act 2004. Any insolvency practice with the resources to deal with a going concern sale in an administration could however be instructed in respect of the type of company that had a defined benefit pension scheme and most smaller firms have the resources to deal with the insolvency of a smaller subsidiary of a group that had one multi-employer defined benefit scheme. Few appointment takers could say that they would never have to deal with the implications of the Pensions Act and all should be aware of the risks involved.