Change cometh - the new Scottish rules
The new Scottish insolvency rules are about to arrive, with the biggest change north of the border in over 30 years.
With effect from 6th April 2019, The Insolvency (Scotland) Rules 1986 are replaced by The Insolvency (Scotland) (Receivership and Winding Up) Rules 2018 and The Insolvency (Scotland) (Company Voluntary Arrangement and Administration) Rules 2018.
There are over 300 pages of legislation split over two sets of Rules. The structure is different, and the language is different. All change, all at once!
Changes include:
- enabling electronic communications with creditors
- removing the automatic requirement to hold physical creditors meetings, although creditors will be able to request meetings
- enabling creditors to opt out of further correspondence and for small dividends to be paid by the office holder without requiring a formal claim from creditors
The new Rules have taken the approach of treating remuneration, decision making, claims by and distributions to creditors as common parts rather than duplicating the provisions within the rules for each insolvency procedure.
There is a separate dedicate part for each of the three types of liquidation. Accounting periods and reporting periods are being aligned, and there is now some flexibility for an office-holder to defer claims for remuneration at an accounting period without the need for Court or Committee intervention.
The new rules apply to all cases - not just new cases after 6 April 2019. The transitional provisions will be fun!