Eileen Maclean features in the TRI 250

Insolvency Support Services director Eileen Maclean has been included in the prestigious TRI 250, the exclusive group of senior professionals across the turnaround, restructuring and insolvency profession.

As an index of influence and best practice, leading trade journal Credit Strategy’s TRI 250 recognises those responsible for the progression of industry standards, and inspiring excellence across turnaround, restructuring and insolvency.

Eileen Maclean to chair Law Society of Scotland Insolvency and Debt Recovery Conference

Insolvency Support Services director Eileen Maclean is to chair and present at the Law Society of Scotland’s Insolvency and Debt Recovery conference next month.

Taking place at the 200 SVS venue in Glasgow on 5 September, the conference will look at key issues and challenges faced by professionals operating in the increasingly complex world of insolvency and debt recovery, and address recent legal changes and how they can be managed in practice.

Eileen will be speaking about the new Scottish Insolvency Rules, highlighting key changes from the previous regime.

Joining Eileen in the impressive line-up of speakers will be:

  • Sian Aitken, Partner, CMS
  • Christina Barr, Solicitor, Brodies
  • Stephen Cowan, Partner, Yuill + Kyle
  • Dr Richard Dennis, Chief Executive, The Accountant in Bankruptcy
  • Andrew Foyle, Partner, Shoosmiths
  • Steven Jansch, Partner and Head of Insolvency, Gilson Gray
  • Paul Kirkwood, Solicitor and Commercial Mediator
  • Louise Laing, Senior Associate, Brodies
  • Bobby Lindsay, Lecturer, University of Glasgow

For more information about the conference and to book, visit the Law Society of Scotland’s website.

Call for evidence on court reporting and court approval of remuneration

The recent R3 Scotland newsletter highlighted some concerns about the time taken for some court reporters to respond, with a request for evidence if appropriate.

We are aware that not all users of court reporters are based in Scotland, and that not everyone is a member of R3. Therefore, if you are experiencing these delays and would like to pass on your concerns, please contact Penny McCoull at penny@asmrecovery.co.uk

Item from R3 Scotland Newsletter – Summer 2019

Penny McCoull
Following concerns raised by committee members about instances where they had experienced delays in receiving reports back from court-appointed reporters, I raised this matter with both the R3 Smaller Practices Group Committee and the Scottish Technical Committee. I have received confirmation that ICAS is aware of the issue and is willing to contact the IPs concerned directly. If any members wish to provide details of specific cases where undue delay has been experienced in obtaining authorisation for their own fees and approval of a scheme of division, can they please email me in confidence (penny@asmrecovery.co.uk) or contact David Menzies at ICAS (dmenzies@icas.com)

The issues can be summarised as:

  • The court report system normally works very well, as IPs are all too aware that their colleagues are waiting for approval of their fees and authorisation of a scheme of division to carry out our main function, which is to return funds to creditors.
  • The system breaks down where some IPs, whether through pressure of their own workload, absence from work or some other reason, are not attending to the audit of files delivered to them in a timely manner. The regulations state that the audit should be carried out within six weeks of the end of the accounting period, which itself is dependent on the appointed IP preparing their accounts within two weeks of the end of the accounting period.
  • RPBs are now looking at court reports carried out by their members as part of the monitoring visit. R3 members are encouraged to advise us of any specific instances where they have waited a longer time than is reasonable for the reporter to submit their report. As everyone’s idea of timescales is subjective, notifications should be made in confidence to R3 for consideration. Members will be notified in due course of the follow-up action taken.
  • Informal discussions with the Courts are being advanced by R3 STC members. However, in order to assess the extent of the issue, the Committee calls for members to provide evidence of their experiences (anonymised if desired), on delays by appointed reporters and/or courts in the approval process.

100% pass rate for ISS Training’s CPI and CPPI students

It’s a clean sweep for ISS Training’s students in the June 2019 CPI and CPPI exam sitting. Every single one of our candidates has passed their exam, with a third achieving a merit.

CPI

Chris Addison, 180 Advisory

George Elliott, Campbell Dallas

Emma Hardie, Cowan & Partners

Jemma Kirk, Thomson Cooper (with merit)

Kirsti Kornav, FRP Advisory (with merit)

CPPI

Tommy Gallacher, Campbell Dallas

Mark Inglis, MLM (with merit)

Fiona McAnnany, Grant Thornton

Gillian McIlroy, AiB

Our director Eileen Maclean, who delivers our CPI and CPPI training, said: “We’re chuffed to bits for all of our students and feeling enormously proud of them all. It’s hugely rewarding to see everyone’s hard work paying off. Very well done, class of 2019!“

Enrolment for our 2020 CPI and CPPI training will be open soon. If you would like to discuss your options, please speak to us at any time on 0845 601 7570 or email courses@insolvencysupportservices.com

Q&A with Eileen Maclean on IPA Committee membership

Insolvency Support Services’ Director Eileen Maclean is a member of the IPA’s Standards, Ethics and Regulatory Liaison Committee. She was recently interviewed for an IPA communications feature. Here’s what she said.

What is your career background?

After a couple of years in the accountancy profession, I found my spiritual home in insolvency. I stumbled into the field 30 years ago and have never left. I spent 9 years with Ernst & Young in Edinburgh, before becoming a self-employed sub-contractor to the insolvency profession in 1999. In 2009 I co-founded Insolvency Support Services Limited, and this year celebrated (another!) 10 years of providing training, compliance, outsourcing and practice support to the UK insolvency profession.

I’ve been a member of R3 and licensed by the IPA since 1996. I represented Scotland on R3’s National Council for six years, am an active member of R3’s Scottish Technical Committee and represent Scotland on the IPA’s Standards, Ethics & Regulatory Liaison Committee. I also represent the IPA and R3 on the AiB’s PTD Standing Committee and Bankruptcy Stakeholder Group and recently attended the Scottish Statutory Debt Solutions Discussion Forum chaired by Jamie Hepburn MSP, Minister for Business, Fair Work and Skills on behalf of the IPA and R3.

Why did you join the Standards, Ethics and Regulatory Liaison (SERL) Committee?

I was invited to join SERL to ensure that any particular Scottish angle on legislation, consultations and regulation was represented and considered by the Committee. It’s important that the IPA’s committees take account of the various jurisdictions their members work in. There are often subtle but key differences in how an insolvency plays out north and south of the Scottish border, and my role on SERL is to ensure that these are reflected. My 30 odd years’ experience as an IP don’t go amiss either!

What is the role of the SERL at the IPA? 

SERL monitors industry activity and issues, including their potential impact on standards in the insolvency profession. We work with the IPA Council to recommend developments to member guidance, ethics and standards and, similarly, liaise with the Joint Insolvency Committee (JIC) to promulgate professional guidance to the wider profession. As part of this, SERL works with the IPA’s regulatory operations department to ensure that understanding is consistent across the organisation in terms of guidance and standards for IPA members.

SERL also plays a key role in formulating the IPA’s response to UK and Scottish Government consultations.

What is the value to you and your firm of being on this committee?

Being on any committee and representing your fellow IPs is a privilege. I work with some great people, and it’s always interesting and useful to hear the wider views and concerns of the others working in the profession. In turn, I can gather and relay common themes to various stakeholders, and it means that ISS’s training, compliance and practice management approach reflects current best practice. Issues that IPs raise with me and my ISS colleagues can be channelled back to SERL, the IPA generally and the AiB, among others. I really enjoy the interaction, our discussions and a well-argued alternative viewpoint.

If you were not an insolvency practitioner, what would you be doing?

The only other thing that I think could provide the variety, the challenges and the complexity of insolvency would be a career in politics. But if I didn’t have to work, I would write, garden and get a dog!

 

 

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.

 

Alison Curry to speak at R3 Personal Insolvency Forum

Insolvency Support Services director Alison Curry will be speaking about “Compliance around the edge” at the R3 Personal Insolvency Forum in Birmingham on 18 June and Huddersfield on 25 June.

We’re looking forward to a wide-ranging discussion at the event on the key issues and challenges facing insolvency practitioners in the personal insolvency market in the coming years.

For more information and to book: https://www.r3.org.uk/personal_insolvency

 

Eileen Maclean speaking at IPA Glasgow Roadshow

Insolvency Support Services director Eileen Maclean will be speaking on the recent Scottish Protected Trust Deeds and Debt Arrangement Scheme consultations at the upcoming IPA Glasgow Roadshow 2019.

It’s gearing up to be a great afternoon of learning, discussing and networking. Hope to see you there.

IPA Glasgow Roadshow 2019

13 June 2019
2pm – 5pm

TLT LLP
140 West George Street
Glasgow
G2 2HG

For more information and to book: https://www.insolvency-practitioners.org.uk/events/event_details/88

Eileen Maclean on the panel for the Edinburgh Insolvency Discussion Group

Insolvency Support Services director Eileen Maclean is delighted to be taking part in the Edinburgh Insolvency Discussion Group (EIDG) Panel Session on 30 May 2019.

The event will be held at ICAS’ offices in Haymarket Yards from 17:30. Steven Jansch, Head of Insolvency at Gilson Gray, will be chairing the event.

We are looking forward to an interesting discussion. Hope to see you there.

Breathing spaces and Statutory Debt Repayment Plans, Moratorium and DAS

What the Insolvency Service’s new proposals have been learning from Scotland

The Insolvency Service has announced plans to introduce a statutory moratorium for individual debtors – a breathing space – and a statutory debt repayment plan (SDRP) in England & Wales. Both provisions draw heavily from their Scottish cousins – the moratorium provisions of the Bankruptcy (Scotland) Act 2016 and debt payment plans (DPP) under the Debt Arrangement Scheme (DAS) – but are distinct in key aspects, not least the role of the IP in DAS, which is not replicated in SDRP.

The role of the IP as money adviser

Following its introduction in 2004, DAS was provided solely by the money advice community. Money advisers were trained to provide DAS, but with no personal financial incentive to reflect their enhanced skills or responsibilities, after an initial flurry of interest and qualifications, the number of DAS-approved money advisers in the free sector levelled off. As a result, it was difficult to access the programme and, where DAS was available in the free sector, it could (and still does) mean a much longer wait for an appointment. DPP numbers in the initial years were disappointing, and it was only following substantial revision to the DAS Regulations in 2011 allowing IPs to set up and run DPPs, that numbers increased. It’s perhaps therefore disappointing (depending on your view!) to see that the SDRP doesn’t envisage a role for IPs.

The Scottish government is looking to extend the ability to be a debt payment distributor (currently restricted to four firms appointed following public tender) to all money advisers, including IPs, with a view to making the procedure more attractive to IPs generally and less complicated from a debtor’s perspective. The role of the IP is generally viewed in Scotland as a positive enabler of DAS and one that relieves the pressure on the money advice sector. To have any chance of success, SDRP will have to see the money advice sector adequately and routinely funded.

Role of the FCA

Any IP doing DAS has to be registered with the Financial Conduct Authority (FCA). Leaving aside the cost implications and the double regulation of FCA/RPB oversight, an IP who is not FCA registered cannot advise on DAS. The insolvency exemption doesn’t cover us, since if we can’t do a DAS, we can’t advise on it. IPs will therefore have to signpost debtors looking for SDRP to the money advice sector.

Impact on IVAs

The big question for IPs will be what impact SDRP will have on the number of IVAs. Similar concerns about the impact of DAS on protected trust deeds (PTDs) were expressed, but the anticipated reduction in PTDs didn’t happen. Arguably that’s because the products provide different solutions and meet the distinct needs of different sectors of the market, and SDRP and IVA will do the same. There’s a further argument that the focus on money advice and breathing spaces will see an increase in individuals generally seeking debt advice.

Breathing space as a ‘blocker’ and DAS as preferred solution

What will be interesting is the extent to which the breathing space will be used, and if so, to what extent it will be used to block action by a creditor. In Scotland, the moratorium provisions have been used far less than expected. It’s often creditor action that propels the debtor to the money adviser, and a moratorium after the event is of no consequence. A bigger problem is DAS being used as a blocker to bankruptcy, given the court’s discretion to allow an attempted DAS as a defence to the award of sequestration. DAS as a solution is therefore prioritised, and the interaction of SDRP and English bankruptcy law will determine whether SDRP is to be given the same ‘preferred’ status.

Debtor’s property, rent or mortgage arrears

A Scottish moratorium doesn’t prevent action against a debtor by their landlord or secured lender in respect of their property, and there is still the risk that a debtor could lose their tenancy or face repossession. DAS has always struggled with rent or secured lender arrears, and it’s only very recently that mortgage and rent arrears can be excluded from the DPP. This allows creditors to accept or reject the proposal on full disclosure, but partial inclusion. The plans for SDRP specifically include such arrears as priority debts. Coupled with the proposed ban on no-fault eviction in England & Wales, it will be interesting to see that practical effect these have on protecting debtors in leasehold property.

Another key differential is the option to include the sale proceeds or a lump sum released on the re-mortgaging of the property in DAS whereas in SDRP, the property will not be included in any way. The option to include as a discretionary condition in DAS has again only recently been introduced, to assist debtors who wanted the ability to offer a lump sum sourced from a future sale or re-mortgage of the house. That more closely mirrors IVA provisions, and where property is part of a debt solution, an IVA may well be the most appropriate option

CFS v. SFS

Scotland is attempting to replace the Common Financial Statement with the Standard Financial Statement, and it is the SFS which will underpin the SDRP. The aim is the same: there should be a common platform against which everyone is assessed and their contribution fixed. In theory, when introduced in Scotland, this was to ensure that there was no ‘contribution shopping’, there was consistency of assessment wherever the debtor sought advice, and certainty of contribution on entry into the solution of choice. Of course, the reality has been somewhat different, and most criticism seems aimed at the DAS Administrator’s assessment of and fixing of contributions. Insolvency Service take note!

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