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Insolvency Rules (England and Wales) 2016 – good news all round?

On 25 October 2016, the Insolvency (England and Wales) Rules 2016 (“2016 Rules”) were laid before Parliament.  They are not due to come into force in England and Wales until 6 April 2017 and, at that time, will apply to all existing and future insolvency appointments.  When they come into force, they will repeal and replace the Insolvency (England and Wales) Rules 1986 (“1986 Rules”) and thus sit alongside the Insolvency Act 1986 providing modernised procedural rules to be followed in the conduct of insolvency proceedings.

The Department for Business, Energy & Industrial Strategy, in conjunction with the Insolvency Service, consider that the 2016 Rules will provide significant savings – estimated at between £86.19m and £240.09m over a 10 year period.  This estimate is predicated upon the fact that the 2016 Rules are designed to modernise, consolidate and simplify the legislation governing the conduct of insolvency proceedings.  These savings, if they are actually achieved, will be enjoyed primarily by Creditors in terms of reduced time costs charged by Office Holders and Insolvency Lawyers arising from and associated with insolvency appointments. 

I suspect, regardless of whether these savings materialise or not, the 2016 Rules will be welcomed by Office Holders and Insolvency Lawyers alike.  The current body of rules governing the conduct of insolvency proceedings runs to no less than 28 Statutory Instruments which are designed to update and simplify the 1986 Rules.  The reality is that they achieved quite the opposite, creating a semi-impenetrable web of inter-twined legislation. 

The 2016 Rules were intended to centralise thee rules governing the conduct of insolvency proceedings.  However, the 2016 Rules run to 446 pages and are thus hardly light bedtime reading.  It will take time for Office Holders, Insolvency Lawyers and the Court to get to grips with them, but on first blush it seems to be evolution rather than revolution. The layout is relatively straightforward, with a number of the Schedules to the 2016 Rules being particularly useful, for example:

• Schedule 4 (pages 423 – 426) includes a table setting out the requirements for service of specified documents and the corresponding Rule;

• Schedule 5 (page 427) confirms that the CPR provisions for calculating time limits (CPR 2.8(a)) apply, save as provided in the Schedule; and

• Schedule 6 (Pages 428 – 432) confirms the appropriate Court in which insolvency proceedings should be commenced.

I hope that the 2016 Rules have the impact that the Government expects them to, in terms of time and cost savings for all stakeholders in insolvency proceedings.  I suspect that the benefits will be harder to quantify than the Government’s 10 year projection would have us believe.  Whether they do or not, they certainly seem to be more user-friendly.  Whether that remains the case once Article 50 of The Lisbon Treaty is triggered by the Government, which coincidentally could be around the same time that the 2016 Rules are enforced, remains to be seen. 

The lasting influence in England and Wales of the EU Insolvency Regulation (1346/2000), and from 26 June 2017 the Recast Insolvency Regulation, in the Post-Brexit era will need to be considered along with all other case law and statute with a European provenance.


These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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