The RPBs have recently announced that they plan to change a couple of specific points in SIPs 3 and 9 when the revised SIPs are issued, but that in the meantime IPs should comply with the planned changes rather than the current wording of the SIPs. We welcome this as a practical and innovative approach and encourage them to use it more widely. This approach means that uncontroversial changes to the SIPs can be introduced much more quickly rather than having to wait for a complete revision of a SIP, which can take many months to achieve. If only legislative problems could be addressed in such a pragmatic manner.
SIP 3
The RPBs have recognised that the Insolvency Service publication, “In debt? Dealing with your creditors” is a valid alternative to the R3 guide “Is an IVA right for me?” As a result, you can now provide either of the leaflets to the debtor in order to meet your obligations under SIP 3, even though the current wording of SIP 3 requires you to just provide the R3 guide to the debtor.
On a practical note, the OFT prefers the Insolvency Service document and it also covers all options whereas the R3 guide only compares bankruptcy and IVA. Despite the unfortunate inclusion of address details for CCCS, who operate an IVA provider in competition with many IPs, in the back of the booklet, we have been recommending the use of this booklet for some time. By issuing it before you interview the debtor and then using the options disclosed in it to provide some structure to your interview, we find that IPs are in a much better position to provide evidence that they have made the debtor aware of all the options available.
SIP 9
The RPBs have now taken a pragmatic approach to category 2 disbursements in CVLs that are converted from Administrations. The 2010 rules provide that where an Administration commenced on or after 6 April 2010 is converted to CVL, the fee approval in the Administration is valid in the CVL without the liquidator needing to obtain fresh approval from any committee, if there is one, or the creditors. On a strict interpretation of SIP 9 you would still need specific approval of category 2 disbursements to enable you to draw them in the CVL. The RPBs agree that this is an unnecessary regulatory burden given the recent legislative changes, and so have indicated that the statutory continuation of your fee approval also applies to your category 2 disbursement approval.
