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

MVLs in Scotland – the law of unintended consequences?

Eileen Maclean has been hot on the heels of the new Insolvency (Scotland) Rules and suggests there could be risks for liquidators and members in MVLs.

Scotland’s new corporate insolvency Rules, the Insolvency (Scotland) (Company Voluntary Arrangement and Administration) Rules 2018 and the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 (the new Scottish Rules) come into force on 6 April 2019.

Since their publication, we have been poring over them. We’ve had a good look at MVLs under the new Rules and highlight some potential issues in this article – not all of them necessarily intended by the Rules’ creators. No doubt as issues arise and are considered, practice and interpretation will develop. But as things stand, what are we faced with?

Transitional and savings procedures

The new Scottish Rules apply to cases open at 6 April 2019, save for any express transitional or savings provisions. Very few apply to MVLs.

Part 4 of the current 1986 Scottish Rules only applies to MVLs as specified in Schedule 2. Part 7 of the new Scottish Rules states that it ‘applies in winding up’. No definition of ‘winding up’ is given, but some Rules in Part 7 clearly refer to MVL, CVL or WUC. Generally, therefore, Part 7 applies to all processes, solvent or insolvent, voluntary or compulsory.

What does that mean in practice? Statutory interest will apply from 6 April onwards, when currently it doesn’t, to both existing and future cases. Statutory processes that previously did not apply to MVLs, eg accounting periods, will do so going forward and, in the absence of any savings provisions, for existing cases too.

Creditor claims

Where a liquidator in an MVL is dealing with creditor claims, the accounting period process specific to Scotland now applies, with all its attendant deadlines. The first accounting period is six months and cannot be shortened. Part 7, Chapter 4 Claims by Creditors now applies (which makes sense – why have a different basis of calculation in an MVL). R7.32 Payment of Dividends states that on the expiry of the appeal period (or the final determination of the last such appeal) the liquidator must pay to the creditors the dividends in accordance with the scheme of division. The small debts provisions at R.34 apply.

Any liquidator dealing with a claim now must do so within the context of the Rules. Claims by creditors must be submitted in terms of R7.16 not later than eight weeks before the end of an accounting period. The liquidator adjudicates per R7.19 and must, not later than four weeks before end of the period, accept or reject the claim. Creditors then have a right to appeal to the court not later than 14 days before the end of the period. These time limits can be varied by the court per R7.31(2)(c )(ii) (there won’t be a liquidation committee in an MVL). Alternatively, the liquidator could apply to court to set an earlier last date for claims per S153 of the Insolvency Act 1986.

The way the new Rules apply, it will in practice shift the onus onto the directors to make sure that creditors are paid pre-appointment.

While there might not be many MVLs where the liquidator is dealing with creditor claims, there will be some. And the way the new Rules apply, it will in practice shift the onus onto the directors to make sure that creditors are paid pre-appointment.

Statutory interest

R7.27 Order of Distribution imports statutory interest into MVLs where currently there is none, albeit the rate in Scotland drops to 8% from 15% on 6 April 2019. It makes sense that statutory interest applies consistently to MVLs UK-wide, and the approach to minimising statutory interest on corporation tax is back to being a UK one. Again, there are no savings provisions here, so interest now appears to apply in relation to MVLs open as at 6 April 2019. On the bright side, future debts provision for discounting at the official rate back to the date of liquidation is now included to all winding ups in R7.22.

What this potentially means in practice

  • Directors must ensure that all outstanding liabilities of the company are paid pre-appointment and, if not, members need to understand that there is a potential statutory interest liability (of up to six months).
  • Possible court application post-appointment per S153/R7.31 to deal with claims in shorter timescales than those set out in the Rules.
  • Unless there is active management of the timescales in R7.19, creditors will have to wait to get paid, assuming no appeal to an adjudication, until no earlier than 14 days before the end of the first accounting period. That entitles them to approximately 5.5 months of statutory interest as a result. That will be material in some cases, not in others. The cost of making an application to court may be worth it in some cases, but not in others.
  • Where you have a significant exposure to statutory interest in an ongoing MVL, consider paying creditors before 6 April 2019 (and use s153 accordingly).

What was previously a straightforward process now seems overly complicated, and rather goes against the spirit and intention of the new Rules.

All of this raises issues of risk for MVL liquidators and additional cost for members, where creditors have not been paid in advance of appointment. What was previously a straightforward process now seems overly complicated, and rather goes against the spirit and intention of the new Rules.

Insolvency Support Services have been examining the new legal requirements and their practical implications at a series of courses, which we can offer as bespoke in-house training, and will be providing document packs and compliance support.

For further information about how Insolvency Support Services can assist you in adjusting to these changes, contact: enquiries@insolvencysupportservices.com

 

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

Take the hassle out of ensuring your checklists and document packs are new-Rules-compliant

Have you updated your checklists and document packs in time for the introduction of the new Scottish Insolvency Rules on 6 April 2019?

Our new-Rules-compliant standard documents are available to order now, for delivery early/mid March, ready for the new legislation commencement date.

As we have been highlighting on our New Rules courses, there are process changes to Court Liquidation (SWUC) Creditors and Members Voluntary Liquidation (SCVL and SMVL) and Administration (SADM).

Some of the changes to SCVL and SMVL will ensure that the process in Scotland now mirrors the England & Wales Rules, but crucially, the remuneration approval process in Scotland for insolvency liquidations, and to an extent SADM, is not changing in structure, although there are amendments to how it will apply. There are myriad other changes that will need to be incorporated into your checklists and document packs.

We can supply checklist and document packs to support the revised Scottish statutory processes.

We have revised the structure of our document packs to reflect that the liquidation post appointment process will be broadly identical.  Prices are as follows:

Procedure Checklist Document Pack Combined
SWUC 750 750 1,500
SCVL 750 750 1,500
SMVL 750 750 1,500
Liquidation Generic 750 750
SADM 750 1,500 2,250

If you want to purchase just one liquidation pack, say SCVL, you would purchase the checklist, the specific document pack and the generic Liquidation pack, at a total of £2,250. If you were intending to purchase SCVL and SWUC, then you purchase the two specific checklists and packs, and the generic liquidation pack to support both procedures, at a combined cost of £3,750.

Purchase of three or more packs attracts a discount.

If you or your colleagues attended or wish to purchase our New Rules webinar, the cost of that attendance to a maximum of 5 participants and £250 (net) is redeemable against the purchase of any of the above checklists or document packs.

Contact us at enquiries@insolvencysupportservices.com or on 0845 6017570.

We’re speaking at R3’s Series of SPG Technical Reviews

Insolvency Support Services’ Eileen Maclean and Alison Curry are looking forward to speaking at R3’s series of SPG Technical Reviews, specifically designed for insolvency and restructuring professionals in small and medium-sized practices, in the next few months.

Their practical, focused sessions will cover the new Scottish Insolvency Rules, highlighting key changes and differences to the current England and Wales Rules.

Want to know what has changed and why? You can catch Eileen at the R3 SPG Technical Reviews in Birmingham (26 February) and Leeds (30 April) and Alison in London (14 February) and Exeter (9 May).

For more information and to book, click here.

If you need more than an overview and would like to book one of our half day courses on the new Scottish Rules, click here for more information. We’ve also added an extra Edinburgh course on 19 February due to demand. Booking is straightforward: contact Danielle Kelly and the ISS Training courses team on 0845 601 7570 or on courses@insolvencysupportservices.com.

 

New Scottish Insolvency Rules 2018

Thanks to everyone who attended the first of our New Rules training courses in Glasgow on 16 January. Great to see so many of you, and thanks for such positive feedback on the course. Out of an overall score of 5, this course scored 4.69!

Testimonies include: “ very informative training session / well presented” and “the content is brilliant”.

We have also taken on board your feedback about the amount of content – for which thanks – and will adjust that for courses going forward.

There is still an opportunity to book for the Edinburgh course on 22 January, and booking is open for Aberdeen, Manchester and London. Alternatively we still have half days slots available for in-house team training.

Contact courses@insolvencysupportservices or for more details click here