Citation, commencement and interpretation

1. —(1) These Rules may be cited as the Insolvency (Amendment) Rules 2015.

(2) Rules 1 and 13 will come into force on 6th April 2015 and all other Rules will come into force on 1st October 2015.

(3) In these Rules “the 1986 Rules” means the Insolvency Rules 1986( 3 ).

Amendments to the 1986 Rules

2. In Rule 2.47 (reports to creditors) of the 1986 Rules after paragraph (1)(dc) insert—

“ (dd) a statement setting out whether as at the date of the report—

(i) the remuneration anticipated to be charged by the administrator is likely to exceed the fees estimate or any approval given under Rule 2.109AB,

(ii) the expenses incurred or anticipated to be incurred are likely to exceed, or have exceeded, the details given to the creditors prior to the determination of the basis of remuneration, and

(iii) the reasons for that excess; ” .

3. —(1) Rule 2.106 (fixing of remuneration) of the 1986 Rules is amended as follows.

(2) In paragraph (2)(b)—

(a) omit “(as administrator)”, and

(b) for “arising in the administration” substitute “as set out in the fees estimate”.

(3) After paragraph (2) insert—

“ (2A) Where the administrator proposes to take all or any part of the remuneration on the basis set out in paragraph (2)(b), the administrator must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, give to each creditor of the company of whose claim and address the administrator is aware—

(a) the fees estimate, and

(b) details of the expenses the administrator considers will be, or are likely to be, incurred.

(2B) The fees estimate and details of expenses given under paragraph (2A) may include remuneration anticipated to be charged and expenses anticipated to be incurred if the administrator becomes the liquidator where the administration moves into winding up.

(2C) Save where the administrator has given the information under paragraph (2A), the administrator must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, give to each creditor of the company of whose claim and address the administrator is aware, details of—

(a) the work the administrator proposes to undertake, and

(b) the expenses the administrator considers will be, or are likely to be, incurred. ” .

(4) In paragraph (6), for “(3)” substitute “(3C)”.

4. After Rule 2.109A (review of remuneration) of the 1986 Rules insert—

“ Exceeding the fees estimate

2.109AB. —(1) The administrator’s remuneration must not exceed the total amount set out in the fees estimate without approval.

(2) The request for approval must be made—

(a) where the creditors’ committee fixed the basis, to the committee;

(b) where the creditors fixed the basis, to the creditors;

(c) where the court fixed the basis, by application to the court;

and Rules 2.106 to 2.109 apply as appropriate.

(3) The request for approval must specify—

(a) the reasons why the administrator has exceeded, or is likely to exceed, the fees estimate;

(b) the additional work the administrator has undertaken or proposes to undertake;

(c) the hourly rate or rates the administrator proposes to charge for each part of that additional work;

(d) the time that additional work has taken or the administrator anticipates that work will take;

(e) whether the administrator anticipates that it will be necessary to seek further approval; and

(f) the reasons it will be necessary to seek further approval. ” .

5. After Rule 2.109C (apportionment of set fee remuneration) of the 1986 Rules insert—

“ Application of Rules 2.109A, 2.109AB and 2.109C where a company subsequently can make a distribution to unsecured creditors

2.109D. —(1) This Rule applies where—

(a) the basis of remuneration has been fixed in accordance with Rule 2.106(5A);

(b) the administrator now thinks that the company has sufficient property to enable a distribution to be made to unsecured creditors other than by virtue of section 176A(2)(a); and

(c) the administrator makes—

(i) a request under Rule 2.109A or 2.109AB; or

(ii) an application under Rule 2.109C.

(2) The request under Rules 2.109A and 2.109AB must be made—

(a) where there is a creditors’ committee, to the committee; or

(b) where there is no creditors’ committee, to the creditors under Rule 2.106(5);

and Rule 2.106(5A) will not apply.

(3) The application under Rule 2.109C must be made—

(a) where there is a creditors’ committee, to the committee; or

(b) where there is no creditors’ committee, to the creditors under Rule 2.106(5);

and Rule 2.106(5A) will not apply. ” .

6. In Rule 4.49B (reports to creditors and members – winding up by the courts) of the 1986 Rules after paragraph (1)(f) insert—

“ (fa) a statement setting out whether as at the date of the report—

(i) the remuneration anticipated to be charged by the liquidator is likely to exceed the fees estimate or any approval given under Rule 4.131AB,

(ii) the expenses incurred or anticipated to be incurred are likely to exceed, or have exceeded, the details given to the creditors prior to the determination of the basis of remuneration, and

(iii) the reasons for that excess; ” .

7. —(1) Rule 4.127 (fixing of remuneration) of the 1986 Rules is amended as follows.

(2) In paragraph (2)(b) after “arising in the winding up” add “as set out in the fees estimate”.

(3) After paragraph (2) insert—

“ (2A) Where the liquidator proposes to take all or any part of the remuneration on the basis set out in paragraph (2)(b), the liquidator must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, give to each creditor of the company of whose claim and address the liquidator is aware—

(a) the fees estimate, and

(b) details of the expenses the liquidator considers will be, or are likely to be, incurred.

(2B) Save where the liquidator has given the information under paragraph (2A), the liquidator must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, give to each creditor of the company of whose claim and address the liquidator is aware, details of—

(a) the work the liquidator proposes to undertake, and

(b) the expenses the liquidator considers will, or are likely to be, incurred. ” .

8. After Rule 4.131A (review of remuneration) of the 1986 Rules insert—

“ Exceeding the fees estimate

4.131AB. —(1) The liquidator’s remuneration must not exceed the total amount set out in the fees estimate without approval.

(2) The request for approval must be made—

(a) where the liquidation committee fixed the basis, to the committee;

(b) where the creditors fixed the basis, to the creditors;

(c) where the court fixed the basis, by application to the court;

and Rules 4.127 to 4.131 apply as appropriate.

(3) The request for approval must specify—

(a) the reasons why the liquidator has exceeded, or is likely to exceed, the fees estimate;

(b) the additional work the liquidator has undertaken or proposes to undertake;

(c) the hourly rate or rates the liquidator proposes to charge for each part of that additional work;

(d) the time that additional work has taken or the liquidator anticipates that work will take;

(e) whether the liquidator anticipates that it will be necessary to seek further approval; and

(f) the reasons it will be necessary to seek further approval. ” .

9. After Rule 4.131C (apportionment of set fee remuneration) of the 1986 Rules insert—

“ Application of Rules 4.131A, 4.131AB and 4.131C where a company subsequently can make a distribution to unsecured creditors

4.131D. —(1) This Rule applies where—

(a) the basis of remuneration has been fixed in accordance with Rule 2.106(5A);

(b) the liquidator now thinks that the company has sufficient property to enable a distribution to be made to unsecured creditors other than by virtue of section 176A(2)(a); and

(c) the liquidator makes—

(i) a request under Rule 4.131A or 4.131AB; or

(ii) an application under Rule 4.131C.

(2) The request under Rules 4.131A and 4.131AB must be made—

(a) where there was a creditors’ committee, to the liquidation committee; or

(b) where there was no creditors’ committee, to the creditors under Rule 4.127(5).

(3) The application under Rule 4.131C must be made—

(a) where there was a creditors’ committee, to the liquidation committee; or

(b) where there was no creditors’ committee, to the creditors under Rule 4.127(5); ”

10. In Rule 6.78A (reports to creditors) of the 1986 Rules after paragraph (1)(f) insert—

“ (fa) a statement setting out whether as at the date of the report—

(i) the remuneration anticipated to be charged by the trustee is likely to exceed the fees estimate or any approval given under Rule 6.142AB,

(ii) the expenses incurred or anticipated to be incurred are likely to exceed, or have exceeded, the details given to the creditors prior to the determination of the basis of remuneration, and

(iii) the reasons for that excess; ” .

11. —(1) Rule 6.138 (fixing of remuneration) of the 1986 Rules is amended as follows.

(2) In paragraph (2)(b) after “arising in the bankruptcy” add “ as set out in the fees estimate”.

(3) After paragraph (2), insert—

“ (2A) Where the trustee proposes to take all or any part of the remuneration on the basis set out in paragraph (2)(b), the trustee must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, give to each creditor of the company of whose claim and address the trustee is aware—

(a) the fees estimate, and

(b) details of the expenses the trustee considers will be, or are likely to be, incurred.

(2B) Save where the trustee has given the information under paragraph (2A), the trustee must, prior to the determination of which of the bases set out in paragraph (2) are to be fixed, give to each creditor of the company of whose claim and address the trustee is aware, details of—

(a) the work the trustee proposes to undertake, and

(b) the expenses the trustee considers will be, or are likely to be, incurred. ” .

12. After Rule 6.142A (review of remuneration) of the 1986 Rules insert—

“ Exceeding the fees estimate

6.142AB. —(1) The trustee’s remuneration must not exceed the total amount set out in the fees estimate without approval.

(2) The request for approval must be made—

(a) where the creditors’ committee fixed the basis, to the committee;

(b) where the creditors fixed the basis, to the creditors;

(c) where the court fixed the basis, by application to the court;

and Rules 6.138 to 6.142 apply as appropriate.

(3) The request for approval must specify—

(a) the reasons why the trustee has exceeded, or is likely to exceed, the fees estimate;

(b) the additional work the trustee has undertaken or proposes to undertake;

(c) the hourly rate or rates the trustee proposes to charge for each part of that additional work;

(d) the time that additional work has taken or the trustee anticipates that work will take;

(e) whether the trustee anticipates that it will be necessary to seek further approval; and

(f) the reasons it will be necessary to seek further approval. ” .

13. Rule 7.11(3) (general power of transfer) of the 1986 Rules is amended by the insertion after “may be commenced under the Act” of the words “or to the County Court at Central London”.

14. In Rule 13.13 (expressions used generally) of the 1986 Rules after paragraph 18 insert—

“ (18A) “Fees estimate” means a written estimate that specifies—

(a) details of the work the insolvency practitioner and his staff propose to undertake,

(b) the hourly rate or rates the insolvency practitioner and his staff propose to charge for each part of that work,

(c) the time the insolvency practitioner anticipates each part of that work will take,

(d) whether the insolvency practitioner anticipates it will be necessary to seek approval or further approval under Rule 2.109AB, 4.131AB or 6.142AB, and

(e) the reasons it will be necessary to seek such approval under these Rules. ” .

Transitional provisions

15. —(1) The amendments made by Rules 2 to 12 and Rule 14 apply where—

(a) the appointment of an administrator takes effect,

(b) a liquidator is nominated under section 100(2), or 139(3) of the Act ( 4 ),

(c) a liquidator is appointed under section 139(4) or 140 of the Act,

(d) a person is directed by the court or appointed to be liquidator under section 100(3) of the Act,

(e) a liquidator is nominated or the administrator becomes the liquidator under paragraph 83(7) of Schedule B1( 5 ) to the Act, or

(f) a trustee of a bankrupt’s estate is appointed,

on or after 1st October 2015.

(2) Rule 4.127(5A) of the 1986 Rules does not apply where an administrator is appointed prior to 1st October 2015 and—

(a) a company which is in administration moves into winding up under paragraph 83 of Schedule B1 to the Act and the administrator becomes the liquidator, or

(b) a winding-up order is made immediately upon the appointment of an administrator ceasing to have effect and the court under section 140(1) appoints as liquidator the person whose appointment as administrator has ceased to have effect,

on or after 1st October 2015.