Brand new Investigation and CDDA Checklist

We now have an Investigation and CDDA checklist, intended for use by IPs and their staff dealing with investigations into company director conduct, recovery and disqualification.  Applying across insolvent liquidation, administration and receivership, the checklist reflects current insolvency and CDDA legislation and all statutory references are hyperlinked to the relevant sections.  

The checklist retails for £500 (ex VAT).

There are two supporting online sessions: Pre-appointment advice to directors and SIP2 and Investigations, which normally retail for £50 (ex VAT) per participant.  One single use registration of each online session will be included with the purchase of the checklist for a limited period of time.  For two or more registrations to each session, please speak to us directly.

Coronavirus: An IP’s Risk and Response

Our job at Insolvency Support Services is to support your business. We have produced this short, free to view online presentation to assist and protect your practice as you deal with the exceptional circumstances of COVID-19.  We’ve considered the risks for your insolvency practice, and suggested practical responses and strategies for addressing these.

We have also set out below how we can assist you to meet these challenges. Please contact us at enquries@insolvencysupportservices.com if we can help in any way.

Documentation and Policies

Revised policies and protocols for contribution management

Working from home policy

Data Processing Impact Assessment

Data Protection policies and registers
Online Learning

AML2020 update

Compliance Awareness Online Learning covering: GDPR, AML, Ethics and Vulnerability – ideal introductions to staff new to insolvency or looking for a refresher of these subjects

Social Media on Appointment

Foundations in Insolvency
Outsourcing

Case Reviews

Case Closure

Case Progression and annual reports

Current Guidance  

For reference, following are links to the latest guidance from AiB and IPA.


AiB – COVID-19 – Contingency Arrangements

IPA – Insolvency Guidance Papers: Control of cases

Covid-19: Important information for IPA members

New Practice Management Workshops

Insolvency Support Services is delighted to launch our new Practice Management Workshops. A brand-new training stream, our workshops are designed to keep you up to date with your regulatory requirements. The programme will help you build or improve an efficient, robustly compliant insolvency practice in a cost-effective manner.

This stream is intended for insolvency practitioners (particularly sole practitioners or SME businesses), those considering obtaining their insolvency licence or setting up in practice, and anyone responsible for internal compliance processes or with an interest in the subject matter.

There are five workshops to attend or choose from, running in London, Birmingham and Edinburgh throughout 2020:

• Practical AML Policies and Procedures
• Financial Controls and Annual Compliance Statements
• Data Privacy and Cyber Crime Prevention Policies
• Avoiding Discrimination and Making Adjustments to Services
• PII, Bonding and Insurance considerations

Attend all five and pay for just four workshops or choose the workshops that meet your practice’s needs, in the venue that’s most convenient for you.

For full details of each workshop, click here.

CPD Learning Outcomes

• Keep up to date with current regulatory requirements
• Learn how to build or improve an efficient, robustly compliant practice
• Cost effectively implement statutory and regulatory requirements into your business
• Reduce your practice’s risk profile

Cost

Each half day workshop: £155 + VAT

Book three workshops and get our usual 50% discount on the third workshop: £387.50 + VAT

Book four workshops for just £527 + VAT

Book all five workshops and get five for the price of four: £620 + VAT

Bespoke In-House

We can also run this training in-house for your team. This is a cost-effective option for larger practices. Contact us to discuss available dates and requirements.

Half day course: £975 + VAT

Full day course: £1,950 + VAT

 

 

 

 

New Course: Anti-Money Laundering 2020 (including 5MLD changes)

Meet your annual AML training obligation with the ISS online Anti-Money Laundering Update. This short course is tailored specifically to those working in the insolvency profession and includes:

• An overview of the key changes to the above, by virtue of the 5th European Money Laundering Directive (5MLD)
• A refresher on key elements of the UK’s Anti-Money Laundering and Terrorist Financing regime, to include:
o Identifying risks
o Client Due Diligence / Enhanced Due Diligence
o Suspicious Activity Report

Knowledge checking

To reinforce learning values the course includes individual knowledge checking, so you can be assured that that each member of your team is alive to the risks they face in their role and can play their part in controlling these risks to your practice.

Individual certification

Each participant receives their own personalised certificate of completion in order that you can evidence that you have addressed the training requirements contained in the Money Laundering Regulations to your AML Supervisor.

This course is aimed at insolvency personnel and relevant support staff and is suitable for people with varying levels of pre-existing knowledge and technical ability.

Flexible completion and progress tracking

Individual registrations may commence at any time, to cater for work flows and new joiners within your firm. The time available for completion can be determined by you to suit your business (we recommend allowing around 4 weeks from registration) and to ensure everyone fully engages with their training, we will provide you with updates on participation and completion.

Cost

Individual – £75

5-person package – £200

20-person package – £700

50-person package – £1,500

All prices are exclusive of VAT at the prevailing rate.

Book Your Place

For enquiries and bookings, email: courses@insolvencysupportservices.com

Sample materials for Compliance Awareness Online Learning

You can preview the different types of content included in our new modular Compliance Awareness Online Learning course in our free samples. They will take just a few minutes to view or complete. Click here to access the free samples.

Instructional video content

Concise, comprehensive videos that you can watch, learning when and where is most convenient for you.

Reference materials and handouts

Downloadable documents to read and keep for future use and reference.

Knowledge checks

Multiple-choice knowledge checks to reinforce the value of the learning.

To sample the Ethics and Professional Standards Quick Quiz, register as a user with your name and email address.

Course Modules

Our Compliance Awareness Online Learning course is delivered in four modules, which you can mix and match to cater for your practice’s needs:

1.      Anti-money laundering (AML)

2.      Data privacy (GDPR)

3.      Vulnerability awareness

4.      Ethics and professional standards

Click here or below to watch our one-minute introductory video.

To find out more, click here, call 0845 601 7570 or email courses@insolvencysupportservices.com

 

 

ISS Training launches Compliance Awareness Online Learning

Insolvency Support Services’ training division, ISS Training, has launched an innovative new Compliance Awareness Online Learning course, adding an online learning platform to the firm’s course delivery methods.

The course is delivered in four topical modules: anti-money laundering, data privacy, vulnerability awareness, and ethics and professional standards.

Alison Curry, a director of Insolvency Support Services, commented: “We have developed this course in this format to assist insolvency practices manage compliance risks cost-effectively, meet their training obligations and protect their firm’s reputation.

These days insolvency practitioners and their teams must have a sound knowledge of practice areas beyond the scope of technical insolvency training.

There have been significant legislative changes in the areas of anti-money laundering and data protection, vulnerability awareness is high on the political agenda, and ethics and professional standards issues continue to dominate the complaints mailboxes of the regulators.

If all team members have a good grasp of the essentials of these subjects, they can flag issues with their managers as they arise. Failing to identify an issue in a timely manner presents a risk to the practice that can result in reputational damage to the practice and regulatory sanction for its insolvency practitioners.”

More information about Compliance Awareness Online Learning  including an introductory video and sample content, can be found here.

Managing risk in your practice

Effective compliance awareness

A frequent observation among our clients is how, increasingly, insolvency practice seems to be less about applying the Insolvency Act and rules and more about meeting other obligations; whether it be anti-money laundering (AML), GDPR, vulnerability awareness or the ever-evolving expectations of the regulators.

But ensuring you and your team have a good level of awareness of these peripheral aspects of our day-to-day work shouldn’t be seen as a distraction from the real task at hand – it is central to controlling risk presented to your business. And in some cases, such as AML and data protection, it is a legal requirement. Embedding a culture of compliance awareness, that is routinely acted upon throughout the firm within daily tasks, acts to nip potential issues in the bud. So, what can you do to manage risk in your practice?

Effectively managing risk is essential to success

Risk management is defined as the forecasting and evaluation of financial risks, together with the identification of procedures to avoid or minimise their impact. The requirement to assess various forms of risk has become a recurring theme in many areas of law and regulation. While it can all seem somewhat nebulous, getting it wrong can be costly in terms of time, fines and penalties and reputational damage to you and your firm.

Models for managing risk identify four key strategies: avoid, control, accept and transfer. The risk acceptance strategy (i.e. just accept any penalties if and when they arise) isn’t a viable option for a licensed professional, not least given the gravity of the risks we manage and the severity of the potential punishments that can be meted out by the likes of the Information Commissioner’s Office (ICO) or the Financial Conduct Authority (FCA). Given the personal nature of insolvency licensing, the opportunities for risk transference are limited to those that can be insured against, and avoiding risk entirely isn’t likely to result in the acceptance of many appointments. So practically speaking, we are left with the option of controlling the risk we face, as best we can.

Start with the known unknowns

None of us have a crystal ball. The “unknown unknowns” (unexpected or unforeseeable conditions) will pose a potentially greater risk simply because they cannot be anticipated based on past experience. Challenging circumstances will necessarily occur from time to time. This is where robust internal policies and procedures come in and the assistance of lawyers and specialist advisers will be called upon.

However, on a daily basis there are “known unknowns” that we can better manage by improving our understanding of what is expected of us and what to look out for. In key compliance areas it isn’t just the licensed professional that needs to be alive to the risks, everyone has a part to play in the risk management process, whether that be in detecting a financial crime, keeping personal data private, meeting the needs of a vulnerable client or maintaining expected professional standards requirements. A chain is only as strong as its weakest link.

Knowledge is power

When it comes to managing risk, you can only really do so if you are aware of the form those risks might take and what is expected in terms of response. Experienced practitioners will have an inherent understanding of the risks in an appointment, built upon their years of experience, and their internal alarm bells will ring when they detect something out of the ordinary. That knowledge is applied almost subconsciously and not always articulated to those around them. We need to share the key elements of that knowledge and experience with the entire team in order to maximise its effectiveness on risk management. Training the team need not be costly, unduly time consuming nor disruptive to the business, and can yield significant benefits. And we can help you do that.

It’s not entirely optional

The Data Protection Act 2018 and the Money Laundering Regulations 2017 contain mandatory staff training requirements. The FCA is currently consulting on further guidance around the treatment of customers in vulnerable circumstances which places a strong emphasis on the need to upskill client-facing staff. While FCA regulation has not come to us all just yet, it gives a clear steer on the directions of travel for regulatory expectations when dealing with those in vulnerable circumstances. And that may include directors and employees, not just indebted individuals.

Also sometimes overlooked are the expectations of the Ethics Code; which states up front that “Although an insolvency appointment will be of the insolvency practitioner personally rather than his practice, he should ensure that the standards set out in the Code are applied to all members of the insolvency team.” Realistically, the team can only do that if they are equipped with a basic knowledge of what professional standards are expected of insolvency practitioners and why.

We can help

We can help your team manage these key compliance risks with the New ISS Compliance Awareness Online Learning Course. For further information contact: courses@insolvencysupportservices.com

First published in the August 2019 edition of RECOVERY News and reproduced with the permission of R3 and GTI Media.

What a difference a day makes…

Notice punctuality is much more than a virtue for IPs.

Many actions by office-holders (or directors in respect of prospective appointments) require the delivery of a notice to categories of persons (typically creditors), providing certain specified notice periods.

The Insolvency (England and Wales) Rules 2016 formalised the rules around notice, deemed date of delivery and calculation of time periods. The Scottish equivalents of these rules came into force in April of this year, and the issues discussed below are of equal application to appointments in Scotland.

Working in the world of compliance, we are frequently invited to review clients’ case files. On a number of occasions in recent months, we’ve seen files where insufficient notice has been given to persons entitled to receive it. The legal effects of short notice are debatable, but what is certain is that any doubt about the validity of a resolution will be extremely unwelcome.

In many cases, we are talking about simple and avoidable calculation errors resulting in short notice by a single day. In this article we will examine what difference a day can make. The criteria are all clearly set out, so why are we seeing so many instances of short notice?

Deemed date of delivery – day zero

One area of confusion seems to be that delivery is itself subject to rules around when it is deemed to have taken place. The deemed date of delivery is calculated with reference to the delivery mechanism employed and is based on business days. It does not, therefore, include weekends and UK Bank Holidays.

The deemed date of delivery is not included within the calculation of the notice period, so is effectively day zero, not day one. By way of example, if you mail by first-class post on the Friday before a Bank Holiday weekend, the deemed date of delivery is not until the following Wednesday and day one of the notice period does not commence until the Thursday.

Notice periods

Notice periods in excess of five days are based on calendar days, not business days, and the default position for notice periods is 14 clear days, unless specified to the contrary. Clear days means including neither the day of delivery, nor the day of the event. So, when fixing a decision date, you must typically add 15 days to the date of deemed delivery, not 14 (as we frequently see).

The administration conundrum

It’s well known that proposals must be sent to creditors within eight weeks of appointment and, where a decision on those proposals is sought, for the initial decision date to be within ten weeks.

However, the rules require 14 days’ notice of the decision date to be given. So, if you exclude the date of the decision itself, the date of delivery and the deemed delivery period, sending out proposals on the last day of the eight weeks necessarily means the initial decision date will not fall within the ten weeks and an extension will be required. We’ve seen a number of cases where practitioners have sent their proposals out on the last day of week eight, seeking to hold the decision on the last day of week ten, with the effect that creditors have received short notice of the decision.

Effect of short notice

The legal effect of short notice is debatable. Some comfort can certainly be drawn from rule 12.64 – ‘Formal defects’ (Scottish equivalent: rule 1.56), which provides that

‘No insolvency proceedings will be invalidated by any formal defect or any irregularity unless the court before which objection is made considers that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by any order of the court.’

But that comfort might be rather cold if the defect is in the appointment process. In Pui-Kwan v. Kam-Ho it was held that the predecessor of this rule (r7.55) was only available once there was a valid insolvency appointment (and not in that case, to cure a defect in an inquorate board meeting at the inception), and in Minmar we saw an administrator’s appointment held to be invalid for a lack of notice to the company. Although in a recent and more encouraging decision, Cash Generator Ltd v. Fortune and others, the liquidators’ appointment was held valid despite a failure to give all creditors notice of a deemed consent procedure.

Short notice will necessarily give rise to rights of challenge by those affected, even if not the automatic invalidity of the process. The consistent message from regulators is that they expect any defects on the approval of remuneration to be remedied (and remuneration to be repaid in the meantime).

Practical tips:

  • Make sure your teams are clear on the calculation of delivery times and notice periods.
  • Why not add the ‘deemed date of delivery’ to your Certificates of Delivery template? It will act as a helpful aide-memoir and instantly flag the earliest date a proposed decision date can be held.
  • If you realise that you’ve provided short notice of a decision on remuneration, consider whether you need a fresh resolution or some form of ratification. Your RPB may expect you to do so.
  • We provide compliance review and in-house training services and can assist with any aspect of your compliance needs.

For further information about how we may assist you, please contact: enquiries@insolvencysupportservices.com

First published in the June 2019 edition of RECOVERY News and reproduced with the permission of R3 and GTI Media.

 

Insolvency (Scotland) Rules: Statutory Declarations

An aim of the new Rules is to modernise the language of the statute. One of the terms that we wave goodbye to is affidavit, and in its place comes statutory declaration. The language might not be ancient Latin, but it’s still an old and well-established piece of statute that sits behind it, stemming as it does from the Statutory Declarations Act 1835.

A Statutory Declaration is a statement made in lieu of an oath and the Act contains a prescribed form of Statutory Declaration. A Statutory Declaration is included within the current standard form Notices of Appointment of Administrators and therefore a similar approach to the various documents which require a Statutory Declaration in terms of the New Rules seems reasonable. The following wording (amended to reflect the terminology used in the relevant Rule) can be inserted into the relevant document.

I [ ] do solemnly and sincerely declare that [the information provided in [this notice/this statement of affairs/statement of concurrence] is,] [these accounts are,] to the best of my knowledge and belief, [true][accurate and complete],

AND I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1835.

Declared at _________________________________

Signed _____________________________________

This ______________ day of ___________________ 20

before me __________________________________

A Notary Public or Justice of the Peace

It appears that a solicitor in Scotland is not authorised to take oaths as per s18 of the 1835 Act, and therefore any statutory declaration should be signed in front of a notary public or justice of the peace. If any doubt as to your requirements, take independent legal advice.

How we can assist you

We’ve been examining in detail the new legal requirements and their practical implications. We can offer bespoke in-house training, Rules-compliant document packs and checklists, and compliance support.

For further information about how we can assist you in adjusting to the changes brought about by the new Rules, contact enquiries@insolvencysupportservices.com

Insolvency (Scotland) Rules: Nomination Process

The new Rules will come into force on Saturday 6 April 2019. We will be keeping you posted where we can on interpretations and issues in the period of their introduction.

First up, we’ve walked through the nomination process to have a look at the timescales involved where an interim liquidator, appointed on 8 April 2019, seeks and obtains one nomination as liquidator, and goes back to the creditors for a decision by way of deemed consent. We have assumed that the interim liquidator in this example issues notices at the last possible occasion, and uses 2nd class post wherever possible. The table below outlines what we think that process looks like.

Event Date or deadline Statutory Reference Narrative
Winding Up Order (WUO) Monday 08/04/2019 S138 Must as soon as practicable seek nomination within 28 days beg within WUO.  Therefore 28 days in this example expires on Sunday 5 May. It’s possible that that RPBs may take view on an  IL always sending out at last possible time given s138 requires nominations as soon as practicable.  Can ignore Easter bank holidays, since requirement is 28 days (not business days) from WUO.
Last date for posting report and nomination request: using 2nd class post 29/4/2019 R1.38 Deemed to have been delivered 4 business days after the date of sending.

 

Last date report and notice can be received by creditors Friday 3/5/2019 Report and nomination notice received by creditors on Friday (since Sunday  not a business day)
Nominations received from Creditors Mon 13/5/2019 R5.22(5) Has to be received within 5 business days of the date of the notice issued requesting nominations (if they are sending it 2nd class, they would have to post it Tues 7th May latest (since Mon 6th May is a Bank Holiday) to ensure received by IL in time)
Decision date expiry Monday 3/6/2019 R5.22(9) The decision date has to be no later than 21 days after the date of receiving nominations – nomination date 13/5/2019 + 21 days = Monday 3 June 2019 (can ignore bank holiday on 27 May since Rules refer to 21 days and not business days).
Therefore, latest date for issue of circular, giving a minimum of 14 days’ notice, to include 2 business days for 1st  class.  (note posting 2nd class here doesn’t give enough clear notice) Wed

15/5/2019 deemed to be delivered Fri  17/5/2019 at latest)

R5.22(10) Giving at least 14 days’ notice + 4 business days for 2nd class post not to include the date of delivery and the date of the decision. (Rule 1.3)  In effect, on the next business day following the expiry of the nomination period, using 2nd class post doesn’t allow 14 clear days’ notice of the decision to be issued – since Rule 1.3 defines clear days not to include the date of sending or the date of the event.  On this occasion, looks like you are going to have to use first class post.
Last date for creditors to exercise 10:10:10 objection and request a physical meeting Fri 24/5/2019 R8.8 Creditors may within 5 business days from the date of delivery of the notice require a physical meeting to be held. The convenor then has 3 business days from the threshold for requests being received to send notice in accordance with the Rules, giving creditors 14 days’ notice of the meeting. That would have to take into account the bank holiday on Monday 27 May.
Latest date for decision (the backstop) Thu 6/6/2019 R5.22 (7) where a decision is sought under r5.22(6) the decision date must be not more than 60 days from the date of the winding up order.

Most of you will have diary systems and prompts to assist you with the planning of your processes. However, this exercise demonstrates that you can’t leave everything to the last minute and issue by 2nd class post. You simply won’t meet your deadlines.

This is a good example of why putting everything on a website going forward will be advantageous, and understanding the implications of delivery (rather than sending).

How we can assist you

We’ve been examining in detail the new legal requirements and their practical implications. We can offer bespoke in-house training, Rules-compliant document packs and checklists, and compliance support.

For further information about how we can assist you in adjusting to the changes brought about by the new Rules, contact enquiries@insolvencysupportservices.com