The Insolvency (Amendment) Regulations (Northern Ireland) 2006

Explanatory Note

(This note is not part of the Regulations).

These Regulations amend the Insolvency Regulations (Northern Ireland) 1996 (“the 1996 Regulations”) which make provision for the regulation of administrative matters arising in connection with the winding up of companies and the bankruptcy of individuals in Northern Ireland.

The Regulations make provision for payments into the Insolvency Account to be transmitted by electronic means in addition to the existing paper-based methods of payment. They also provide that the Department of Enterprise, Trade and Investment may at its discretion, and provided that the liquidator or trustee requests this, authorise payments out of the Insolvency Account by electronic means (paragraphs 1, 5 to 11 and 13 to 19 of the Schedule).

A new regulation 3A is inserted into the 1996 Regulations to make provision for when the Department of Enterprise, Trade and Investment can require information from an administrator and the circumstances in which an administrator can dispose of a company’s records (paragraphs 3 and 4 of the Schedule).

The Regulations also provide that whenever there are any monies standing to the credit of a company or the estate of a bankrupt in the Insolvency Account the company or, as the case may be, the estate of the bankrupt shall be entitled to any interest received in respect of those monies (paragraphs 12 and 20 of the schedule). Prior to the coming into operation of these Regulations, interest was only payable on balances in the Insolvency Account which were in excess of £2,000.

The Regulations provide for the remuneration of the official receiver to be calculated on the basis of hourly rates for his officers and himself (paragraphs 21 and 23 of the Schedule). Prior to the coming into operation of these Regulations, the remuneration of the official receiver was, in certain circumstances, calculated by reference to a percentage of assets realised and distributed. The new remuneration provisions will apply where a winding-up order, bankruptcy order or an appointment as interim receiver or provisional liquidator is made on or after 27 March 2006 (regulation 2).

A new regulation 35 is inserted into the 1996 Regulations. This provides that an insolvency practitioner appointed on or after 27 March 2006 can be required to provide a statement of the number of hours spent on a case by the insolvency practitioner and his staff by grade and further makes provision for the circumstances in which a statement should be made and the information to be included in that statement (paragraphs 3 and 22 of the Schedule).

These Regulations make amendments to the financial arrangements in connection with the operation of the Insolvency (Northern Ireland) Order 1989. These arrangements were considered in a Regulatory Impact Assessment that was prepared in connection with the Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)). Copies of this assessment are available from the Legislation Unit, The Insolvency Service, Fermanagh House, 20A Ormeau Avenue, Belfast BT2 8NJ.