Eleanor Temple provides a summary of the Temporary Insolvency Practice Direction (IPD)

Eleanor Temple provides a summary of the Temporary Insolvency Practice Direction (IPD)

A temporary IPD which has been drafted by Mr Justice Zacaroli with Chief ICCJ Briggs, Mr Justice Snowden and Mr Justice Marcus Smith is in force from today.

It applies to all insolvency proceedings throughout the Business and Property Courts, subject to variations outside London as directed by the relevant supervising judge. It came into force on 6th April and will remain in force until 1 October 2020 unless amended or revoked by a further insolvency practice direction in the meantime.

Its stated purpose is to “assist court users during the current COVID-19 pandemic by avoiding the need for parties to attend court in person, and to deal with some of the problems arising from the need for the courts to operate with limited staff and resources”.

The Vice-Chancellor has issued a Variations and Guidance Note, also effective from today in relation to the on the North and North Eastern Circuit (“the Circuits”).

 

What does the Temporary IPD provide?

In summary, the new IPD deals with the following:

  1. Filing a notice of intention to appoint an administrator and a notice of appointment of an administrator - (Paragraph 3)
  • For the purposes of Rule 1.46(2) in the case of a CE-filing of any of the Notices, the Notice shall be treated as delivered to the court at the date and time recorded in the Filing Submission Email.
  • The Notices to which this applies are:

(1) a Notice of Intention to Appoint an Administrator filed by a company or its directors under Paragraph 27 of Schedule B1;

(2) a Notice of Appointment of an Administrator filed by a qualifying floating charge holder under paragraph 18 of Schedule B1; and

(3) a Notice of Appointment of an Administrator by a company or its directors under Paragraph 29 of Schedule B1.

  • This shall not apply to a Notice of Intention to Appoint an Administrator filed by CE-File pursuant to paragraph 27 of Schedule B1 outside the time period 10:00 hours to 16:00 hours on any day that the courts are open for business.
  • Any such Notice filed by CE-file outside that time period shall, for the purposes of Insolvency Rule 1.46(2), be treated as delivered to the court at 10:00 hours on the day that the courts are next open for business.
  • Accordingly, the date on which the time period of ten days in paragraph 28(2) shall begin is the date on which the courts are next open for business.
  • The does not apply to a Notice of Appointment filed by CE-File pursuant to paragraph 29 of Schedule B1 outside the time period 10:00 hours to 16:00 hours on any day that the courts are open for business. Any such Notice filed by CE-file outside that time period shall be treated as delivered to the court at 10:00 hours on the day that the courts are next open for business.
  • All Notices shall continue to be reviewed by the Court, as and when practicable, in accordance with paragraph 5.3 of PD510. The validity and time at which the appointment of an administrator is effective shall not be affected by reason only of any delay in Acceptance of the Notice.
  • Electronic Working may not be used to file a Notice of Appointment of an administrator under paragraph 14 of Schedule B1 by the holder of a qualifying floating charge outside Normal Court Opening Hours. Such a Notice may only be filed outside Normal Court Opening Hours by the procedure set out in Rules 3.20 to 3.22.

 

  1. Adjournment of pending applications and petitions – (Paragraph 4)
  • All applications, petitions and claim forms (save for petitions for winding-up and bankruptcy to be heard before an ICC Judge sitting in the Rolls Building in London) currently listed for hearing prior to 21 April 2020 are adjourned, to be re-listed according to criteria of urgency.

(https://www.judiciary.uk/you-and-the-judiciary/going-to-court/high-court/courts-of-the-chancery-division/insolvency-and-companies-courts/).

  • The Vice-Chancellor has noted that on the Circuits few cases have been required to be adjourned, however those matters that have been or are adjourned can be the subject of an application for it to be relisted on the basis that it is genuinely urgent using the procedure set out in paragraph 5 of the TIPD, or will be re-listed by the court as soon as is reasonably practicable, giving priority so far as possible to such matters over the listing of any new non-urgent matters.

 

  1. Listing Urgent hearings before a High Court Judge or an Insolvency and Companies Court Judge - (Paragraph 5)
  • Parties should email the ICC Judges’ clerks at ICL.Hearings1@justice.gov.uk , or relevant High Court Judge clerk setting out 5.1.1 the nature of the application/claim form/petition (“Application”);
  1. why it is urgent;
  2. estimated time for hearing and pre-reading;

iii.        number of parties who will need to attend; and

  1. your confirmation that the hearing can be conducted by Skype for Business, another stated remote communication application, or telephone.
  • Subject to further amendments, the ICC clerk or High Court Judge clerk will: allocate the hearing to a judge and send a Skype (or other application) meeting invitation or dial-in details to the parties; confirm whether the Application should be issued and paid for via CE-File or whether an undertaking to issue and pay the fee will be required due to limitations with CE File processing; either endorse the Application via CE File in the usual way or provide an email setting out the time and date of hearing which shall be treated for all purposes as if endorsed on the Application.
  • The applicant/claimant/petitioner must send only those documents which are essential for the hearing by PDF (or by sending a link to an online data room) to the clerk for forwarding to the judge, confirming the pre-reading time required.
  • The judge will join the hearing by Skype or other means at the allotted time.
  • The judge will make directions for the filing of a draft minute of order which, as soon as practicable, will be sealed and returned to the serving party in the usual way.
  • Paragraph 5 of the TIPD will apply to proceedings on the Circuits save that the references to such hearings being heard by a High Court Judge or an ICC Judge should be read as referring to hearings before a Judge authorised to sit under section 9 of the Senior Courts Act 1981 or a District Judge (as appropriate). The references to the clerk to a High Court Judge and to the clerks to the ICC Judges should be read as referring to the BPC court staff in each of the relevant centres, who should be contacted on the following emails:

 

Leeds

BPC.Leeds@justice.gov.uk

Liverpool

Insolvency.liverpool.countycourt@justice.gov.uk;

Manchester

Manchester.chancery@justice.gov.uk

Newcastle

NewcastleBPC@justice.gov.uk

 

  • In addition to matters which of their nature are urgent, for the purpose of paragraph 5 of the TIPD, on the Circuits the following matters shall be also presumed to be urgent unless the court in a particular case thinks otherwise:
  • Applications for relief from the consequences of sections 127 or 284 of the Insolvency Act 1986.
  • Petitions to wind up a company in the public interest.
  • Applications made pursuant to section 17 of the Company Directors’ Disqualification Act 1986.
  • Applications made pursuant to section 216 of the Insolvency Act 1986.

 

  1. Remote Hearings - (Paragraph 6)

 

Unless ordered otherwise, all insolvency hearings will be conducted remotely by way of Skype for Business or such other technology as the parties and the court agree in advance of the hearing.

 

  1. Temporary listing procedure for winding-up and bankruptcy petitions - (Paragraph 7)

 

  • The Court shall allocate time slots for groups of 2 or more petitions. Each time slot shall be given a designated meeting link using Skype for Business, or such other video conferencing technology as the relevant Court decides, or BT MeetMe, or such other telephone conferencing technology as the relevant court decides. The links shall be published on the daily cause list. The onus is on the parties to ensure they are able to utilise the link provided.

 

  • Paragraph 7 of the TIPD will apply on the North and North Eastern Circuits save that the reference to Court clerks should be read as referring to the BPC court staff in each of the relevant courts.

 

  1. Other insolvency hearings - (Paragraph 8)
  • Judges, clerks, and/or officials will, in each case, wherever possible, propose to the parties:-
  1. a Skype for Business (or other video conferencing technology) call at the allocated time by sending an invitation or otherwise making available a link;
  2. a BT MeetMe (or other recordable telephone conferencing facility) to be arranged by the court or one or other of the parties at the court’s direction in good time before the allocated time for the hearing.
  • If the parties disagree with the court’s proposed method of hearing, they may make submissions in writing by email or CE-file (if available), copied to the other parties, as to what other proposal would be more appropriate. On receipt of submissions from all parties, the judge will make a determination as to the way in which the hearing will take place, and give all other necessary directions.

 

  1. Statutory Declarations - (Paragraph 9)

 

  • Where Schedule B1 requires a person to provide a statutory declaration, a statutory declaration that is made otherwise than in-person before a person authorised to administer the oath may constitute a formal defect or irregularity.
  • Pursuant to Rule 12.64 it is open to the court, on objection made, to declare that such a formal defect or irregularity shall not invalidate the relevant insolvency proceedings to which the statutory declaration relates, unless the court considers that substantial injustice has been caused by the defect or irregularity which cannot be remedied by any order of the court.
  • Where a statutory declaration is made in the manner described below then the defect or irregularity (if any) arising solely from the failure to make the statutory declaration in person before a person authorised to administer the oath shall not by itself be regarded as causing 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.

 

  1. Local Business – Variations and Guidance for the Circuits

 

  • Matters comprising Local Business as defined in paragraph 3.7 of the IPD which are already listed before an open court or a staffed court shall be heard in accordance with directions given by the judge in that court.
  • Matters comprising Local Business which are already listed in a suspended court will be heard remotely on the date and time fixed unless the judge at the suspended court orders otherwise.
  • Upon receipt of a new application at an open court or a staffed court, the application will be reviewed by a judge and, if the matter is Local Business, directions will be given on the application which may, if the circumstances require it, include the application being listed for an attended hearing at the nearest open court.
  • Any new applications or petitions which otherwise would have been issued in a suspended court should instead be issued in the nearest open court which has insolvency jurisdiction save that (a) any petitions which are required by the rules to be presented in one of the hearing centres specified in Insolvency Rule 10.11(4) should be entitled with the name of the relevant centre but sent to the nearest open or staffed court with insolvency jurisdiction for issue on behalf of the relevant hearing centre, and (b) applications to set aside statutory demands must be issued out of the nearest hearing centre identified in Insolvency Rule 10.48(4) which is open or staffed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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