Reminder of reporting requirements under Rule 8.26(4) and Rules 12.36 and 12.37 for Individual Voluntary Arrangements

IPA Insolvency Practitioner newsletter, August 2024

We remind all Insolvency Practitioners of their obligations under Rule 8.26(4) concerning reporting the appointment and vacations of office by supervisors in Individual Voluntary Arrangements (IVAs) and to provide a reminder of the notification requirements of Block Transfers in addition to reporting changes to their Recognised Professional Bodies (RPBs).

Background: Rule 8.26 of the Insolvency (England and Wales) Rules 2016 outlines the requirements for reporting the approval of an IVA to the Secretary of State. Specifically, Rule 8.26(4) mandates the reporting of changes in the position of the supervisor. It is important to note that this requirement applies to each and every form of transfer whether that be via a meeting of creditors, court order or under the terms of the proposal. Failure to provide the update directly impacts the insolvency register and Insolvency Service statistics.

Key requirements under Rule 8.26(4):

Notification of appointment of a New Supervisor:
- Requirement: If a new person is appointed to act as a supervisor in place of the existing supervisor, a notice of this fact must be delivered to the Secretary of State.
- Timing: This notice must be delivered as soon as reasonably practicable following the appointment.
Notification of vacation of office by Supervisor:
- Requirement: If a supervisor vacates their office, a notice of this fact must also be delivered to the Secretary of State.
- Timing: This notice must be delivered as soon as reasonably practicable following the vacation.

Steps for Compliance

Prompt reporting: Ensure that any change in the supervisory position within an IVA is reported to the Secretary of State without delay. The term “as soon as reasonably practicable” implies that there should be no unnecessary delays in reporting these changes.
Accurate information: The notice must include all pertinent details regarding the change in supervisor to ensure accurate and up-to-date records are maintained by the Secretary of State.
Record keeping: Maintain thorough records of all communications and notices sent to the Secretary of State to demonstrate compliance with Rule 8.26(4).

Key reporting points concerning Block Transfer Order (BTO) Rules 12.36 and 12.37 and other large volume transfers

Notice and respondents:
- Applicants for a BTO must notify the Secretary of State before making the application.
- Respondents to the application include:
  - The outgoing office-holder (if not the applicant or deceased),
  - Any person who holds office jointly with the outgoing office-holder,
  - Other persons as directed by the registrar or District Judge.
Supporting evidence:
- Applications must be supported by evidence explaining why it is expedient to appoint a replacement office-holder and including the consent to act of each proposed replacement.

Notification to the IPA

Advance notification:
- In addition to notifying the Secretary of State of an application for a BTO it is important, in order to avoid unnecessary delays, that practitioners ensure that they also notify the IPA well in advance of any proposed block transfers. It is important to note that this is also required whether the transfer is carried out by BTO court order or outside the court process, e.g. in accordance with a provision within the Proposal as approved by creditors.

Conclusion

Adherence to the reporting requirements under Rule 8.26(4) is crucial for maintaining the integrity and transparency of the IVA process. Insolvency Practitioners should engage with this guidance and review their procedures and ensure timely compliance with these requirements and to additionally ensure that any proposed BTO or transfer of a large number of cases by any other method is notified to the IPA. This assists with minimising delays and in ensuring that the IPA is aware of large changes that can impact regulation and the wider profession.

For any questions or further clarification, please contact regulation@ipa.uk.com.

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