Temporary Insolvency Practice Direction (TIPD)

Enforced on 6 April 2020, the TIPD has been introduced in order to provide “workable solutions for court users during the Covid-19 pandemic”. The TIPD supplements the existing Insolvency PD and it applies to all current proceedings. This will be enforced until 1 October 2020, subject to any further amendments or revocation.

Ultimately, the intention of the TIPD is to avoid the need for parties to attend court in person.

The most notable changes are as follows:

1.     Notices filed by way CE-File -

2.    Adjournment of pending applications and non-urgent hearings

3.     Remote Hearings

4.     Statutory Declaration.

Below provides for further details with respect to these changes: 

1.     Filing notices with respect to intention and appointment of an administrator (paragraph 3) 

Para 3 of the TIPD deals with the CE-filing of any Notices of Intention to Appointment Administrators (“NOI”) and Notice of Appointment of an Administrator (“NOA”).

Where a company, director or a qualifying floating charge holder files the NOI or NOA by way of CE-File that the notice "shall be treated as delivered to the court at the date and time recorded in the Filing Submission Email”, subject to timing of receipt, see immediately below.

 Where one of the said Notices are filed by way of CE-File “outside the time period 10:00 hours to 16:00 hours, for the purposes of the Insolvency Rule 1.46(2) is to be treated as delivered to the court at 10:00 hours on the day that the courts are next open for business”. 

The timing of the filing is critical as this provides for confirmation as to when the ten day period begins pursuant to para 28(2).

However, rule 3.20 to 3.22 still applies in that a holder of a floating qualifying charge cannot file a NOA outside Normal Court Open Hours.  

2.     Adjournment of pending applications and petitions (paragraph 4)  

All applications, petitions and claims forms currently listed before 21 April 2020 are adjourned, to be re-listed. The exception is for petitions for winding-up and bankruptcy to be heard before an ICC Judge before the Rolls building, London.

Non-urgent hearings are intended to be relisted within 6 weeks from 21 April 2020 

Deemed urgent

However, if a party to a matter considers that the hearing is urgent, an application pursuant to paragraph 5 of the TIPD can be made to the Court. The following factors should be set out:

• The nature of the application/claim form/petition 
• Why it is urgent
• Estimated time for hearing and pre-reading
• Number of parties who will need to attend; and 
• Confirmation that the hearing can be conducted by Skype for business, another stated remote communication application, or by telephone.

Pursuant to the London Guidance Note of ICC Judge Briggs dated 7 April 2020, the following are deemed to be urgent hearings :

• All applications made pursuant to section 17 of the Company Directors’ Disqualification Act 1986;
• Applications made pursuant to section 216 of the Insolvency Act 1986;
• Public interest winding-up petitions;
• Applications to convene a meeting for a members’ scheme of arrangement
• Capital reduction claims; and
• Cross-border merger claims.

Remote hearings (paragraph 6

Unless ordered otherwise, all insolvency hearings will be conducted remotely, by way of Skype for Business or such other technology as the parties and the court agree in advance of the hearing

Statutory declaration (paragraph 9)

Where the making of a statutory declaration, otherwise than in-person before a person authorized to administer the oath may constitute a formal defect or irregularity pursuant to paragraph 9 of the TIPD. This is because there is no change in the law with respect to the creation of statutory declarations.

However, the court may declare that the defect or irregularity does not invalidate the insolvency proceedings unless the court considers that substantial injustice has been caused by this defect or the irregularity which cannot be remedied by an order from the court.

Where a statutory declaration is made in the manner described below, then the defect or irregularity arising solely from the failure to make the statutory declaration in person before a person authorized to administer the oath shall not by itself be regarded as causing substantial injustice:

• The person making the statutory declaration does so by way of video conference with the person authorized the oath (9.2.1);
• The person authorized to administer the oath attests that the statutory declaration was made in the manner referred to above (9.2.2); and
• The statutory declaration states that it was made in the manner referred to in para 9.2.1 

This TIPD should be read in conjunction with the PD Insolvency Proceedings July 2018 with particular attention to PD510 and Schedule B1