We often find evidence on files of proxies being checked at the last minute, with resultant weaknesses if specific instructions have only been obtained by telephone and ‘chairman’s general’ proxies, or proxies with other defects are used to vote at a meeting supported only by a file note of a phone conversations.
In the worst cases, proxies don’t state the resolutions and provide for and against options or they have not been checked at all and are used incorrectly, potentially invalidating fee resolutions, or in some cases, the IP’s appointment.
A fairly simple system can prevent this situation ever arising. Start by formally admitting all proofs or claims for voting purposes on receipt. It is a simple enough procedure, but often omitted and we often find that someone has been allowed to vote at a meeting without anything to support their claim.
Secondly, train your staff to inspect proxies on receipt. Some IPs use a stamp that requires staff to sign off on key areas, such as the proxy holder being stated, for/against sections being completed and the proxy being signed.
Finally try to draw up a proxy schedule early, specifying those proxies that are to be left out of the vote (chairman’s generals where the chairman could benefit from the use of the proxy), invalid proxies (proxy holder not stated, or other deficiencies that you have not had time to get corrected), etc.
If you get to the proxies early, many errors can be corrected by faxing them back to the signatory and having a revised proxy submitted. This is not always possible, especially where a big firm has submitted their proxy just before the deadline, but it is better to adjourn the meeting while you get the issue resolved than to press ahead regardless.
Be careful also to watch out for when one of the big firms, or HMR&C, have deleted the chairman’s discretion clause. If you have two such proxies on one meeting, you cannot use them unless the votes agree. This is particularly important in IVAs and CVAs where the proxy votes often conflict and you are specifically required to vote against acceptance when a modification is rejected.
If you have two votes with the discretion clause deleted, you must reconcile each modification and obtain an approved variation in writing before casting the vote in favour of the arrangement at the meeting.
