COVID-19: Temporary Insolvency Practice Direction

Posted: April 23, 2020

The Lord Chancellor has approved a new practice direction on insolvency proceedings, which came into force on 6 April 2020 and will continue to be in effect until 1 October 2020 unless amended or revoked, in an effort to maintain a functioning court system during the pandemic.  The Temporary IPD – April 2020 (TIPD) supplements Practice Direction – Insolvency Proceedings July 2018.

Some key points to note:

1. Administrators – filing notices of intention to appoint and notices of appointment

The TIPD applies to notices of intention to appoint an administrator filed by a company or its directors, notices of appointment of an administrator filed by a company or its directors and notices of appointment of an administrator filed by a qualifying floating charge holder.  

Such notices, when filed through the Court’s electronic filing service (CE-file), are treated as delivered to the Court at the time and date recorded in the filing submission email. However, a notice of intention to appoint an administrator or a notice of appointment of an administrator filed by a company or its directors via CE-File must be filed between 10am and 4pm hours on any day that the Courts are open for business. Should the notice be filed outside that time period it will be treated as delivered to the Court at 10am on the day that the Courts are next open for business.  In such event the 10-day time period for the purposes of paragraph 28(2) of the Insolvency Act 1986 shall commence on the date on which the Courts are next open for business.

2. Adjournment of pending applications and petitions

All applications, petitions and claim forms currently listed for hearing prior to 21 April 2020 are adjourned (save for petitions for winding-up and bankruptcy to be heard before an ICC Judge sitting in the Rolls Building in London, see below).  Where any of the parties considers that a matter that has been adjourned is urgent, they may apply to have it re-listed pursuant to the listing procedure set out in paragraph 5 of the new directions.

In the case of petitions for bankruptcy or winding-up, the temporary listing procedure for winding-up and bankruptcy petitions set out at paragraph 7 of the TIPD (and discussed below) shall apply, immediately in the case of petitions to be heard before an ICC Judge sitting in the Rolls Building, and as from the date that the TIPD is brought into effect for each of the other relevant hearing centre of the Business and Property Courts.  This will be specified by a further guidance note to be issued by the supervising Judge for that hearing centre.

3. Remote hearings

All hearings shall be conducted by Skype for Business or such other technology as the parties and the Court agree in advance of the hearing.  Should the judge determine that it is inappropriate to continue the hearing, the hearing shall be adjourned, and a new hearing date and time will be fixed by the Court.

4. Temporary listing procedure for winding-up and bankruptcy petitions

The Court shall allocate time slots for groups of 2 or more petitions and each time slot shall be given a designated meeting link.  Any person who intends to appear at the hearing of the petition must deliver a notice of intention to appear on the petition and provide an email address or telephone number for the purposes of being invited to join the hearing remotely.

5. Statutory Declarations

Statutory declarations may now be sworn by way of video conference with the person authorised to administer the oath.  The person authorised to administer the oath must attest that the statutory declaration was made in accordance with the TIPD.  The wording of the statutory declaration itself and the oath administrator’s signature box must be amended to reflect this.

Jacek Kruza, Trainee Solicitor, Simkins LLP

Thomas Moore, Associate, Simkins LLP