tag:blogger.com,1999:blog-148065272024-03-12T23:00:45.570+00:00Insolvency Compliance Reviews - Compliance On CallInsolvency Compliance Reviews - Compliance On Call is an established and highly respected provider of UK insolvency compliance services, providing reviews, documents, online technical support, and ad-hoc compliance assistance to suit each practice. Directors Bill Burch and Gareth Limb, together with Jenny Sheen, have over 70 years' combined insolvency experience and have directly assisted hundreds of IPs with their compliance.Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comBlogger393125tag:blogger.com,1999:blog-14806527.post-11498803621549016762024-03-01T15:47:00.000+00:002024-03-01T15:47:56.945+00:00Onerous passwords to open PODs<p>We have recently heard that there is a growing trend with certain creditors to submit proofs of debt and proxies for decisions, but in a password-protected format, requiring the IP to telephone to obtain the password. That is a pretty silly way to work for a number of reasons, so we have put this article on our Blog and we will refer to it on LinkedIn and X (formerly Twitter), in the hope that the numpties who thought it was a good idea will reconsider or find an alternative that does not have the potential to increase costs exponentially across the whole insolvency profession.</p><p>For a start, it simply is not necessary. The justification being used is “Data Protection” or “GDPR”, but that just does not apply here. The debtor, whether corporate or personal, is insolvent and their details are available on Companies House or the Individual Insolvency Register. The claimant/creditor will generally be a company, or at least the ones that are currently using password protected proofs of debt are companies. Therefore, the only personal data on the form either relates to the insolvency proceedings and is being submitted under a statutory requirement, so is outside the scope of GDPR, or it is the signature and name of the creditor’s agent. If the person signing multiple thousands of proofs of debt, electronically, on behalf of a range of corporate creditor clients, feels unable to consent to their name being shared with insolvency professional firms, then maybe they need to find a new role.</p><p>Second, if the individual that is signing the proof of debt form is concerned about their personal data, or the agent wants to attach documentation that may include personal data and is unable to get consent from the individuals at their client that may be affected, there has to be a better way than requiring an IP to phone and ask for it every time. Just this week we heard of a case where the creditor failed to answer after 10 minutes. That may not sound like much in one case, but some of these creditor agents submit thousands of proofs of debt per week. The costs of every IP making thousands of unanswered calls and then following up to finally obtain a password will run into millions of pounds. Given the nature of insolvency, a large amount of that money will not be recovered by the IP and, if it is, the creditors will suffer.</p><p>We think that there needs to be some debate across the profession. As yet, I am afraid that we don’t have the answers, but these are some of the questions that we think could be relevant:</p><p>1)<span style="white-space: pre;"> </span>Is there a real need to password proofs of debt at all?</p><p>2)<span style="white-space: pre;"> </span>Can an IP treat a proof of debt as undelivered if it is password protected?</p><p>3)<span style="white-space: pre;"> </span>If the answer to 1) is yes, and the answer to 2) is no, is there a cost-effective alternative?</p><p>4)<span style="white-space: pre;"> </span>Is there a way that proofs of debt and proxies can be submitted without the sort of data that would necessitate password protection?</p><p>One idea that might work would be to have one password for each IP firm, so that the claimant creditor can use it whenever they submit a proof to that firm. Alternatively, could passwords be delivered automatically using a text message or WhatsApp message, so that the IP does not have to phone the creditor?</p><p>We are not convinced that passwords are needed at all, but if they are required, someone needs to find a solution that won’t just increase costs. Of course, it would have been nice if they had thought about it first, rather than issuing password protected proofs and assuming that the additional work and cost would be somebody else’s problem.</p><p>On that happy note, have a lovely weekend!</p>Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-55994117908547634402024-03-01T15:43:00.000+00:002024-03-01T15:43:09.642+00:00MVLs, tax clearance, and arguably unnecessary insurance<p>We have had a couple of queries recently about HMRC, tax clearance, and as a result of the recent article in Recovery magazine, insurance. The fact that the article was written by someone who works for an insurance broker should tell you a lot. Our view is that this is just a marketing piece, trying to create new demand for an existing product in a sector that has not traditionally used it.</p><p>If you have taken sensible steps to confirm that there are no outstanding tax matters, then you should be happy to close the case. Clearance was never worth much on top of that and if you are happy that the directors, members, and accountants have been honest with you, you have checked with the company’s records, and everything seems to be above board, you should have no worries. Even if HMRC subsequently found something, they would restore the company and go after the members, as long as there was no suggestion that you were reckless or negligent. If you were reckless or negligent, I am not sure that tax insurance would cover you in any event.</p><p>There will always be exceptions, and you may want to keep details available if the product is still available in the right circumstances. However, by then the furore around clearance may have died down and they may have pulled the product due to lack of interest. I cannot see any way that you could justify using it regularly across your MVL cases, but the cynic in me thinks that it might be useful in the right sort of case. I can imagine a case where you are receiving all the right assurances, but you feel that something isn’t right. You could suggest getting insurance then and see what their reaction is. If they argue against it and show that they have made full disclosure and it isn’t needed, your hunch was probably wrong. If they agree to pay it, they may well be hiding something and you’d be better to walk away, as the insurance probably won’t help much if they are hiding something deliberately.</p><p>Because this is a developing area, it is always worth seeking out alternative views, so I have just signed up to Malcolm Niekirk’s coffee break webinar on Monday, 4 March. If you are interested, Malcolm can be contacted through Frettons. I’ve not put a link in this article, as it can generate a bit of spam, but if you google Malcolm or Frettons, you’ll be able to get a link to register.</p>Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-25145245270762636872024-02-01T13:53:00.001+00:002024-02-01T13:53:35.222+00:00NCA - SARs reporter booklet Issue 24<p> You can read Issue 24 of the NCA's SARs reporter booklet by clicking <a href="https://www.nationalcrimeagency.gov.uk/who-we-are/publications/698-sars-in-action-issue-24-january-2024/file" target="_blank">here</a>. These booklets contain some interesting information about the use to which SARs are put.</p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-75317658360920126732023-12-21T14:38:00.000+00:002023-12-21T14:38:17.975+00:00External review of “eligibility” or “whole firm” issuesWe could not have failed to notice the increased regulatory attention to “eligibility” or “whole firm” issues over the last few years. Central to that has been the requirement to complete annual reviews of your client monies and SIP 11 systems, together with the requirement in Regulation 21 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR17”) to conduct an independent audit of your AML systems. However, there are other areas, such as training, professional indemnity insurance, licence requirements, and complaints that should be checked regularly outside the sort of insolvency case review work we have traditionally carried out. For the rest of this article, I’ll just refer to them as “whole firm issues”. <br /><br />We have always tried to do as little as we can get away with for each client. We want you to be reasonably compliant, but we recognise that you have to be commercial, so if we are taking up your time and resources, you are not earning money. Maybe we have taken that a bit too far with whole firm issues, relying on you to know that you have to review your AML, clients monies, and SIP 11 systems annually and assuming that you keep evidence of the other whole firm issues as you complete renewals, annual returns, etc. Unfortunately, feedback from the regulators over the last couple of years suggests that some of you are not doing reviews, or are not being sufficiently rigorous when trying to critically review your own systems. <br /><br />As a result, we have designed a review to cover whole firm issues, either as a stand alone visit early in the year or added onto a regular annual review of your insolvency work. In short, we have taken our usual detailed, risk-averse, compliance approach to whole firm issues and designed a range of checks that should initially cause you some concern, but ultimately should help you improve to a level where your regulator will be confident that you are staying abreast of such issues. <br /><br /> We will be contacting clients direct, but if you are not a client and you would like a review, please contact Bill.<div><br /></div>Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-52482390221338952732023-12-16T08:30:00.005+00:002023-12-16T08:30:59.809+00:00NCA - SARs reporter booklet Issue 23<p>You can read Issue 23 of the NCA's SARs reporter booklet by clicking <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/689-sars-in-action-issue-23/file" target="_blank">here</a>. These booklets contain some interesting information about the use to which SARs are put.</p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-17068951095209459192023-11-30T13:34:00.002+00:002023-11-30T13:34:38.553+00:00Companies House changes<p style="text-align: left;">As you may be aware the <span style="color: #202020;"><span style="font-family: inherit;">Economic Crime and Corporate Transparency Act
received royal assent on 26 October 2023. The A</span></span><span style="color: #202020; font-family: inherit;">ct gives Companies House the power to play a more significant role in
tackling economic crime and supporting economic growth. Companies House envisage that over time there will be improved transparency and more accurate and trusted information on
their registers. The Act will have implications for IPs, but at present, since many IPs are part of practices that are limited companies or LLPs I just want to flag up a microsite that Companies House have created that sets out a summary of the changes as they impact on directors and people with significant control of companies. The website can be founds at</span><span style="font-family: inherit;"> </span><a href="https://changestoukcompanylaw.campaign.gov.uk/">Changes to UK company law - Changes to UK company law</a></p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-77108272405939462802023-11-02T17:29:00.000+00:002023-11-02T17:29:08.522+00:00Is HMRC about to say that they will not give tax clearance in MVLs?At today's R3 SPG Forum, Myrtle Lloyd, Director General of Customer Services at HMRC announced that HMRC has decided that they will no longer give tax clearance in MVLs. At the end of her talk, in the Q&A section, her colleague (sorry, I did not catch her name or title) said that although it was something that HMRC were considering in the light of the ICAS technical update published earlier in the year <a href="https://www.icas.com/professional-resources/insolvency/tax-clearance-for-mvls">here</a>, in which ICAS explained that tax clearance was not a legislative requirement in MVLs, it was not yet policy and was just something that was being considered. Requests for tax clearance had dropped off after the ICAS article and HMRC is deciding whether to stop giving tax clearance. In our experience from talking to clients, part of the reason for clearance requests dropping off is that HMRC were way too slow responding, if they responded at all, so liquidators had simply decided to take the risk, after taking the facts of the case into account and deciding when it was safe to do so. <br /><br />If HMRC turns its current thinking into policy, which seems likely based on today’s talk, it will be up to liquidators to decide when to release any final balances and close MVLs that they had been keeping open pending tax clearance. It is early days to be advising on the possible implications of something that may not happen, but any indemnities may take on additional significance, so we suggest that you seek legal advice to tighten them up if necessary. You are also likely to need to keep a detailed file note justifying any decision to release monies and close the case or retain funds until further investigation is completed and/or indemnities are strengthened. We might even see IPs looking for other protection before releasing any final balances, such as some form of bond or surety against future claims. <br /><br />Although it was nice to get the heads-up at SPG, we will watch out for any announcement of it becoming formal policy in Dear IP or wider communication channels. <div><br /></div>Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-90657412896735172062023-09-18T09:27:00.000+01:002023-09-18T09:27:27.519+01:00New SAR portal<p> </p><div style="text-align: left;">The new SAR portal is operational from today. At the moment the portal is running alongside the SARs Online System, but that will be decommissioned later in the year and thereafter you will only be able to use the SAR portal. You will need to register for the SAR portal so it is worth taking that step now. You can find out more information about the SAR portal, including how to register, at <a href="https://sarsreporting.nationalcrimeagency.gov.uk/">SAR Portal | Landing page (nationalcrimeagency.gov.uk)</a></div>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-4774584296008705662023-08-17T11:14:00.000+01:002023-08-17T11:14:54.913+01:00NCA monthly update - August<p>You can read the August edition of the NCA's monthly SARs reporter booklet by clicking <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/669-sars-in-action-issue-21/file" target="_blank">here</a>. These monthly booklets contain some interesting information about the use to which SARs are put.</p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-54963440374331907702023-06-05T10:12:00.001+01:002023-06-05T10:12:59.208+01:00Updated Guidance on submitting SARS from the NCA<p><span style="font-family: arial;">The NCA have just released an updated version of their “Guidance on submitting better quality Suspicious Activity Reports (SARs)” document to deal with errors in the version they released last month. They are now on version 9 and you can access it by clicking </span><span style="font-family: arial;"><a href="https://www.nationalcrimeagency.gov.uk/who-we-are/publications/650-guidance-on-submitting-better-quality-suspicious-activity-reports-sars-v9-0/file" target="_blank">here</a> </span></p><p><br /></p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-36343859931243056362023-05-15T08:23:00.000+01:002023-05-15T08:23:17.815+01:00NCA Monthly Update<p> You can read the May edition of the NCA's monthly SARs reporter booklet by clicking <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/649-sars-in-action-issue-20/file">SARS in Action Issue 20 v1.2</a>. These monthly booklets contain some interesting information about the use to which SARs are put.</p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-47990893267458556032023-03-27T10:01:00.002+01:002023-03-27T10:01:31.914+01:00NCA monthly update<p>You can read the March edition of the NCA's monthly SARs reporter booklet by clicking <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/642-sars-reporter-booklet-march-2023/file" target="_blank">here</a>. These monthly booklets contain some interesting information about the use to which SARs are put.</p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-35914082880867358682023-03-14T09:36:00.000+00:002023-03-14T09:36:50.885+00:00Guidance on submitting a SAR<p><span style="font-family: arial;">The NCA have just released an updated version of their “Guidance on submitting better quality Suspicious Activity Reports
(SARs)” document to deal with errors in the version they released last month. They are now on version 8, which can be found </span><a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/641-guidance-on-submitting-better-quality-suspicious-activity-reports-sars-v8-0/file" style="font-family: arial;" target="_blank">here</a><span style="font-family: arial;"> </span></p><p><br /></p><p><br /></p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-67856740009083506692023-03-08T08:19:00.002+00:002023-03-08T08:19:36.259+00:00Guidance on requesting a defence from the NCA under POCA and TACT<p> The NCA continue to be busy and have now updated and redesigned their guidance booklet "Requesting a defence from the NCA under POCA and TACT. The updated booklet can be found at the NCA website or by clicking the following link <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/43-requesting-a-defence-under-poca-tact/file" target="_blank">Requesting a defence from the NCA under POCA and TACT</a></p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-65130338303549462822023-03-02T09:18:00.000+00:002023-03-02T09:18:31.464+00:00NCA Updates<p> The NCA were busy at the end of February and have issued both their monthly SARs reporter booklet <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/640-sars-reporter-booklet-february-2023/file">February Reporter Booklet V0.3 (nationalcrimeagency.gov.uk)</a> and an updated version of their "Guidance on submitting better quality SARs" <a href="https://www.nationalcrimeagency.gov.uk/who-we-are/publications/446-guidance-on-submitting-better-quality-sars-1/file">Guidance on submitting better quality Suspicious Activity Reports (SARs) v0.2 (nationalcrimeagency.gov.uk)</a>. Both of these documents are worth reading as part of your ongoing AML training.</p><p><br /></p><p><br /></p><p></p><p class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><br /></p><p></p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-5252373374709168992023-02-02T16:55:00.000+00:002023-02-02T16:55:12.784+00:00SIP 3.1 training Thanks to our usual quiet January and a masochistic streak that is typical of Compliance people, we have just completed a training session on the new SIP 3.1. The training is on PowerPoint slides with a recorded commentary and lasts approximately 40 minutes. It includes 10 slides at the end that you can use as prompts for all the changes that we think you will need to make to your documents and processes by 1 March 2023. <div><br /></div><div>You can buy a copy of the PowerPoint slides, with the embedded recording and a copy of the script. Anyone who is interested should email Bill, Gareth and Jenny and one of us will get back to you as soon as possible. The training is £100 plus VAT for non-specialist IVA firms with 3 or less IPs and £200 plus VAT for IVA specialists and firms with more than 3 IPs.</div>Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-61273543285191323322023-02-02T12:02:00.005+00:002023-02-02T12:02:53.745+00:00Submitting a SAR within the regulated sector<p>The NCA have redesigned the form to be used by the regulated sector, including IPs, when submitting a SAR. The updated form can be found at:</p><p><a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/633-submitting-a-suspicious-activity-report-sar-within-the-regulated-sector-1/file"><span style="font-family: "Verdana",sans-serif; font-size: 10.0pt;">https://nationalcrimeagency.gov.uk/who-we-are/publications/633-submitting-a-suspicious-activity-report-sar-within-the-regulated-sector-1/file</span></a></p><p><br /></p>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-24953280836299099532023-01-24T17:52:00.000+00:002023-01-24T17:52:17.516+00:00SARS annual report 2022<div style="text-align: left;"><span style="font-family: times;">The NCA's SARs Annual Report for 2022 can be found on the NCA website – <a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/630-2022-sars-annual-report/file">https://nationalcrimeagency.gov.uk/who-we-are/publications/630-2022-sars-annual-report/file</a></span></div>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-54921695963536212432022-12-21T11:15:00.000+00:002022-12-21T11:15:17.243+00:00SARS Newsletter December 2022<div style="text-align: left;"> <span style="font-family: "Times New Roman", serif; font-size: 16px;">The most recent NCA newsletter can be found at </span><span face=""Calibri",sans-serif" style="font-size: 11pt; mso-ansi-language: EN-GB; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/625-sars-in-action-december-2022/file"><span face=""Verdana",sans-serif">https://nationalcrimeagency.gov.uk/who-we-are/publications/625-sars-in-action-december-2022/file</span></a></span></div>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-88194618992514013922022-12-01T12:56:00.001+00:002022-12-01T12:56:18.891+00:00SARs Newsletter November 2022<div style="text-align: left;"><span style="font-family: "Times New Roman",serif; font-size: 12pt;">The National Crime
Agency publish a monthly newsletter containing information about SARs that have
been submitted to them. It is an interesting and useful source of information
about the sort of issues that they come across and shows how they often rely on
information about fraud etc received from a number of different sources to put
together the whole picture and achieve a conviction. We have subscribed to
receive a copy and will be putting the link to the newsletter on our Blog each
month. The first newsletter can be found at </span><a href="https://nationalcrimeagency.gov.uk/who-we-are/publications/621-sars-reporter-booklet-november-2022/file"><span style="color: blue; font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri;">https://nationalcrimeagency.gov.uk/who-we-are/publications/621-sars-reporter-booklet-november-2022/file</span></a></div>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-80172017884778435792022-10-21T12:31:00.000+01:002022-10-21T12:31:44.719+01:00Delivery dates again - the rolling postal strikesWhen there were postal strikes in August, we considered the likely impact on deemed delivery on our Blog <a href="https://complianceoncall.blogspot.com/2022/08/deemed-delivery-and-postal-strikes.html">here</a>. The postal strikes that are due to take place in November will only apply to certain departments within the Royal Mail, and not necessarily all on the same day. When the strike affected the whole service, it was appropriate to discount the days when you knew that there would be no delivery. Now that the strikes will affect different departments on different days, you would have to decide on a policy, record it, then justify your approach if challenged by a creditor or regulator. <div><br /></div><div>There is no clear solution, because the rules were not written with this situation in mind, but there are a few approaches you could consider:</div><div> <br /><ul style="text-align: left;"><li>Ignore the strikes, work on normal deemed delivery dates, and leave it to creditors or others to challenge you – this is risky, but there is an argument that many creditors are too apathetic to respond.</li></ul><ul style="text-align: left;"><li>Make some allowance for the strikes, without trying to work out exactly which departments are working and which ones are striking – this would be a bit like allowing for overseas post. You could allow an extra working day or two, which would probably be enough in the vast majority of cases. You could even treat the particularly heavy days (e.g. 25 and 28 November) as non-counting days, like Bank Holidays or full strike days.</li></ul><ul style="text-align: left;"><li>Try to calculate the likely delivery on a notice-by-notice basis, deciding which strikes are likely to have an impact and how long they are likely to add to the deemed delivery date – I fear that this would be pretty complicated and might get you close to some of the statutory time limits.</li></ul><ul style="text-align: left;"><li>Try to contact creditors to get consent to use email instead of post, because of the strikes. You could explain the problem and ask for consent, but it would mean chasing people up for a response and even then there may be stragglers who don’t consent, so you end up having to take one of the other options anyway.</li></ul></div><div><br />In addition to the option that you choose, you will probably have to be ready for situations where someone can show that they have had insufficient notice and challenges you before the decision is held. Even if you used a virtual meeting, you would not be able to adjourn it. If it is to be treated as invalid, adjourning it to allow more notice does not change the fact that it is invalid. Instead, you would have to withdraw the meetings (or at least in a CVL adjourn the members’ meeting and withdraw the creditors’ meeting), then reconvene them, allowing more notice. If you had to reconvene a CVL decision and delay a members’ meeting, you would almost certainly have to get a new Statement of Affairs sworn, because the delay would put it outside the time limits. If, in contrast, someone should complain after the meeting, you should be able to rely on rule 12.64, unless they can show that they have been prejudiced by the decision to go ahead, which we would argue is unlikely.</div>Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-57637033376956131332022-09-12T11:36:00.000+01:002022-09-12T11:36:43.826+01:00The Queen's funeral Bank HolidayAlthough this is a technical post about insolvency, it would be remiss of us to attend to the insolvency aspects of the forthcoming Bank Holiday without first expressing our sorrow and deepest condolences on the passing of Queen Elizabeth II. We have lost parents and grandparents and we cannot imagine doing so in the full glare of international attention, while trying to deal with constitutional and ceremonial requirements. Our thoughts are with King Charles III and the rest of the Royal Family.<br /><br />We have already received emails about the technical implications of the additional Bank Holiday that was announced over the weekend. For anyone that may not yet have heard, a Bank Holiday has been announced for the day of the Queen's funeral, Monday 19 September. While most of you are used to leaving time around Bank Holidays, the short notice of this one may give rise to unexpected consequences and this Blog is really just a "heads-up" to make you aware of some of the potential issues.<br /><br />We will start with any decisions in CVLs that have already been convened for Monday 19 September. You could, in theory, bring any members’ meetings forward and still hold the creditors’ decision on the Monday, as there is no statutory restriction on when such a decision procedure can be held. Apart from potentially being seen as disrespectful, however, it may also be difficult for creditors to get involved, as, for example, any postal attempt at objecting could be delayed. If you wanted to go ahead despite the risk, it would require a board meeting to change the members’ meeting date and a new notice and signed short notice consent, but it would also create a centrebind, which is not ideal, especially if you were subsequently required to hold a physical meeting and another IP was appointed. Rather than risk such complications, we would suggest playing safe and starting the process again, writing out to creditors to withdraw the original notices and explaining why. <br /><br />What made this much more complicated, however, is what it does to meetings scheduled to be held during the rest of the week. Anyone that has already convened decisions for Tuesday 20th onwards should be ok, as long as they also issue the statement of affairs quickly, if they have not already done so. The effect of the Bank Holiday is to make Friday the last business day before a Tuesday decision, so you should still check any decisions convened for Tuesday, and possibly Wednesday 21st, just to be sure that enough notice had been given and also that you have time to deliver the statement of affairs the business day before the meeting.<br /><br />The largest amount of disruption, however, is likely to be for people that intended giving notice this week for decisions next week. Even if all creditors are UK based and you are giving notice by first class post, delivery takes place after 2 working days (so Wednesday if posted today). That makes Thursday the first day’s notice, Friday the second and Tuesday (20th) the third, so that the earliest you could now hold the decision would be Wednesday 21 September, with any statement of affairs having to be delivered by Tuesday 20th, so issued by first class post on Thursday 15 September. In the unlikely event that you are able to deliver everything by email, you may be able to shave a little time off, while using second class post or having to deliver to overseas creditors could extend the timings. <br /><br />Although this Blog deals with CVL decisions, similar considerations apply to decisions in other procedures and any other statutory requirements that refer to "business days", such as notice of intention to appoint an administrator, notice to qualifying floating charge holders, and when calculating the business days before administrators' proposals are deemed approved where a paragraph 51 meeting is not being held. We could give more examples, but we think you get the picture.<br /><br />The Blog post does not attempt to cover all of the permutations, just increase awareness of it so that everyone starts thinking before they convene decisions.<br /><br /><br /><br />Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-50709030725021883082022-08-26T10:25:00.000+01:002022-08-26T10:25:11.081+01:00Deemed delivery and postal strikesWe have had a few queries about the impact of postal strikes on deemed delivery of documents by post, so thought it appropriate to issue a brief Blog on the topic. <div><br /></div><div>Rule 1.42 sets out the deemed delivery dates for documents issued by post, and as you are aware documents issued by 1st class post are treated as being delivered on
the second business day after posting, and those issued by 2nd class post are treated as being delivered on the fourth business day after posting. That deemed delivery date is rebuttable though, so if you have evidence that the document was received by all recipients prior to the deemed date of delivery, you could use that as the actual date of delivery. Conversely, if there is a known postal strike on a business day, then you know that the document cannot actually be delivered on that day and also that it will not progress through the postal system on that day either, hence pushing back the actual date of delivery by at least a day. As a result, we think that you should not count known postal strike days when calculating the number of business days you allow where you are using delivery by post. </div><div><br /></div><div>There is a strike today, Friday, 25 August, and the next strike is planned for Wednesday, 31 August. So if a document is posted 1st class on Tuesday, 30 August, treat it as being deemed delivered on Friday, 2 September rather than Thursday, 1 September as would normally be the case. That is on the basis that it is appropriate to exclude from the calculation the strike day Wednesday, 31 August when you know that the post is not being processed.</div>Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-3736416723046844422022-07-27T12:29:00.004+01:002022-07-27T15:11:01.677+01:00Some software that may assist youA client recently put us on to some software to download bank and credit card statements that is a useful tool and which we thought that we would share with you all. It is called Armalytix, and it takes advantage of the open banking system to enable you to download bank statements for the last two years, together with credit card statements for a shorter period, from participating banks in a format that is compatible with Excel. Most banks participate in the open banking system, but one current notable omission is Metro Bank.<br /><br />Because it is based on the open banking system, the bank statements have to be downloaded prior to liquidation or Administration while the account is still in operation, which means that it has to be done by the directors. I have seen a demonstration and it is quick and easy to do. It is something that you could do at a meeting with the directors once you have been formally instructed to act. For more information contact Tony Walker (<a href="#">tony@armalytix.com</a>) or visit their website - <a href="#">Armalytix</a><br /><a href="#"><br /></a>Since the information is required to assist you in preparing the statement of affairs or to assess the appropriateness of an Administration, it is a pre-appointment expense rather than a practice overhead, and so can be recovered from the estate in such appointments.<br /><br />As with all of our recommendations there is nothing in this for us, although if you make use of the software and find it helps you in your work, then please remember that we made you aware of it.
Gareth Limbhttp://www.blogger.com/profile/09954555170131109738noreply@blogger.comtag:blogger.com,1999:blog-14806527.post-42213623106067580562022-06-24T16:13:00.001+01:002022-07-27T15:12:39.738+01:00Is it just us, or has the whole world gone mad? #IVA #ProtocolThe personal debt space is in a bit of a mess at the moment, with a variety of stakeholders and regulators trying to make changes amid turbulent conditions. The ASA is clamping down on inappropriate advertising, albeit not before time. IPs are being held more accountable for their supervision and control of cases in volume IVA providers, also not before time. The Insolvency Service is pushing for firms to be regulated, rather than the IPs that hold the statutory office, yet again not before time. The “new” Insolvency Rules have recently been reviewed for effectiveness. The Single Financial Statement (SFS) has recently been uplifted to allow for rising inflation. All of this seemed to be travelling in the right direction and the cowboys were being pushed out of personal insolvency, or at least corralled into areas where they could cause less trouble. Then we received a draft of the silliest Dear IP that the Insolvency Service has seen fit to consider publishing for many a year. Read on…as it seems to us that someone has lost the plot. <br /><br />The IVA Protocol Standing Committee, which is made up of IP, regulator, creditor and other representatives, all of whom should have the basic knowledge of insolvency necessary to know what they can and cannot do, is understandably concerned that rising inflation is putting IVA contributions under pressure. Their suggested response ignores the basic premise of an “Individual” voluntary arrangement, actively encourages IPs not to follow the legislation, and proposes a series of measures that are fraught with dangers and potential legal challenges. We are not often completely baffled, but we really do not understand how this proposal got as far as a draft Dear IP. They even drafted guidance to accompany it! <br /><br />The idea is that if a debtor cannot afford their current payments and they fall into certain parameters, an IP should be allowed to make changes to the agreed arrangement using the deemed consent procedure. No matter how they dress it up, and frankly there are somethings that you cannot polish, this is a variation. A variation has to be approved by the same requisite majority as the original approval, i.e. 75% or more of the voting creditors. Nothing in the legislation allows an IP to use deemed consent for a variation and we also think that it is risky in practice. Deemed consent cannot be modified or adjourned, so if a creditor wants to object or even allow a different payment, whether lower or higher, a decision procedure will have to be held instead. The Dear IP even suggests, ignoring the concept of an “individual” voluntary arrangement, that a supervisor might give notice of a deemed consent decision for multiple clients in one notice, so if a creditor objects, do all of the cases have to have fresh decisions? Or is there some way to cherry pick the affected cases? <br /><br />The whole document is so fundamentally flawed that it seems unfair to pick individual areas that don’t work, but nobody could ever accuse us of ranting fairly. The Dear IP suggests that if payments drop below 50% of the original payment, they are unlikely to be sustainable and the IP should refer the client to an FCA authorised advisor for an alternative…but the client is still in an IVA, which will now be in breach and should be terminated. The Dear IP suggests that where it appears that the debtor has no assets and a DRO or Bankruptcy is the only likely alternative, the IP should consider proposing a “payments to date” completion. That seems very generous and not entirely in keeping with an IP’s duty to balance the interests of debtors and creditors and enforce the arrangement. Where in the legislation does it say that the IP should just shrug and say “Why not let them off, they tried!”? <br /><br />Who is going to pay for those variations anyway? The supervisor will have to do the work in reviewing the IVAs and convening the decision procedure, so should be recompensed for that work. The Dear IP blandly refers to SIP 9 in connection with a variation, but when taken with the suggestion, no matter how barking, that deemed consent should be used, the implication is that a regulator will look closely at the fees charged by a supervisor who does not use a deemed consent procedure. <br /><br />The Dear IP suggests that if payments are reduced, up to 12 months’ additional contributions could be proposed, as long as it does not take an IVA beyond 7 years. Think about that, 7 years! How can that be a fair and appropriate debt solution? <br /><br />Furthermore, the guidance says “This guidance should be applied” – that means it has to be applied. They are telling you that you have to disregard the legislation. How can they do that? They then go on to say that in non-Protocol cases, if the creditors and consumer agree, the same approach can be adopted. It does not say how that consent would be evidenced. More deemed consent? Smoke signals? <br /><br />You may have gathered that we are not impressed. Shoddy quasi-regulation like this that undermines the legislation and SIPs can only damage the profession and sow confusion. The consumers and creditors that the profession aims to serve will be harmed in the process and IPs will be left in the middle. If challenged at court, is an IP going to be able to say that despite knowing that the legislation and SIPs required a certain series of steps to deal with individuals, they adopted a blanket policy that did not comply with any of it, just on the say-so of the Insolvency Service and a bunch of industry stakeholders, without any basis in law or consultation on its implications? If the Insolvency Service think that the current statutory based IVA regime is no longer suitable for consumer debt creditors as it is too complex and unwieldy, then they should introduce legislation to do something about it. <br /><br />GGT! Or something like that.<br />Bill Burchhttp://www.blogger.com/profile/13985147888904523014noreply@blogger.com