Friday, December 04, 2015

SIP 9 - are we the only ones that are a bit confused?


We have already had to the regulators’ views about which versions of the SIP 9 guidance notes you have to refer creditors to, depending on the date of the case (see our previous Blog post below), but we are now struggling with SIP 9 itself and we don’t know if it just us that has a problem with it.

When the revised SIP 9 was issued for use from 1 December 2015, the regulators all used a similar notice that said “The SIP will apply from the effective date to all cases, irrespective of the date of the insolvency practitioner’s appointment, and the existing SIP 9 will be withdrawn. For avoidance of doubt, the SIP does not apply retrospectively to fee estimates produced prior to the effective date of the SIP.” The effective date on the SIP was 1 December 2015.

However, we looked back at what the last few versions of SIP 9 said and they may give a different view:

The last version (November 2011) said “This SIP applies to all appointments after 1 November 2011. However, insolvency practitioners are encouraged to apply the SIP to all cases, regardless of the starting date, where to do so would not be onerous or give rise to excessive costs.”

The version before that (April 2010 interim version) said “Version 2 of SIP 9 which was the first to require a degree of analysis of time by activity and grade of staff, came into effect on 31 December 2002 and should be complied with in all cases beginning on or after that date. (I’ve taken out a bit about prior cases, because they should now be pretty rare) The present version of the SIP has been revised to take account of legislative changes related to remuneration, disbursements and other expenses introduced since that time, including The Insolvency (Amendment) Rules 2010 and will apply in all cases.” That wording appears contradictory, suggesting that both the old and new SIPs applied to post 31 December 2002 appointments.

Because, strictly speaking, the last version of the SIP only applied to cases after 1 November 2011, it seems, therefore, that prior to 1 December 2015, there was no single “current version of SIP 9”. So, what does the new SIP replace? We think that the regulators probably want you to read their announcement with the latest version of SIP 9 in its widest sense (i.e. read it as “all existing versions of SIP 9”, not just “the existing SIP 9”), so that only the current version of SIP 9 is used, despite the fact that at the same time they want you to keep using old guidance notes. It is all a bit uncertain and unsatisfactory, but someone may clear this up in due course.