Draft Order in Council laid before Parliament and the Scottish Parliament under paragraphs 1 and 2 of Schedule 7 to the Scotland Act 1998, for approval by resolution of each House of Parliament and of the Scottish Parliament.

2017 No. [ ]

Constitutional Law

Devolution, Scotland

Insolvency

The Scotland Act 1998 (Insolvency Functions) Order 2017

Made

Coming into force in accordance with article 1(1)

At the Court , the day of

Present,

The Queen’s Most Excellent Majesty in Council

This Order is made by Her Majesty in Council in exercise of the powers conferred upon Her by sections 63(1)(b) and (3), 108(1)(b) and (3), 113(3) and (4) and 124(2) of the Scotland Act 19981.

In accordance with paragraphs 1 and 2 of Schedule 7 to that Act2, a draft of this Order has been—

(a)

laid before and approved by a resolution of each House of Parliament; and

(b)

laid before and approved by a resolution of the Scottish Parliament.

Accordingly, Her Majesty, by and with the advice of Her Privy Council, makes the following Order:

Citation, commencement, extent and interpretation1.

(1)

This Order may be cited as the Scotland Act 1998 (Insolvency Functions) Order 2017 and comes into force on the day after the day on which it is made.

(2)

This Order does not extend to Northern Ireland.

(3)

In this Order—

“the 1986 Act” means the Insolvency Act 19863;

“the 1992 Act” means the Friendly Societies Act 19924;

“the 1998 Act” means the Scotland Act 19985;

“the 2000 Act” means the Limited Liability Partnerships Act 20006;

“the 2010 Act” means the Interpretation and Legislative Reform (Scotland) Act 20107;

“incorporated friendly society” has the same meaning as in section 116 of the 1992 Act;

“limited liability partnership” has the same meaning as section 1(2) of the 2000 Act;

“oversea limited liability partnership” has the same meaning as in section 14(3) of the 2000 Act8;

“the EU Regulation” has the same meaning as in section 436(1) of the 1986 Act9; and

“winding up” in relation to companies, incorporated friendly societies and limited liability partnerships, includes winding up of solvent, as well as insolvent companies, incorporated friendly societies and limited liability partnerships.

Reserved functions shared by a Minister of the Crown and the Scottish Ministers2.

(1)

Subject to paragraph (2), the functions described in paragraph (3) are exercisable by the Scottish Ministers concurrently with a Minister of the Crown, so far as they are exercisable by the Minister of the Crown in or as regards Scotland.

(2)

The Scottish Ministers may exercise a function under paragraph (1) only with the agreement of a Minister of the Crown.

(3)

The functions are those conferred by—

(a)

section 411(1)(b) and (2) of the 1986 Act10 (company insolvency rules) for the purpose of making rules which give effect to any provision about winding up in the Parts of the 1986 Act described in paragraph (4) or the EU Regulation;

(b)

section 411(1)(b) and (2) of the 1986 Act as applied by section 23 and paragraph 69(1)(a) of Schedule 10 to the 1992 Act11 (insolvency rules and fees) for the purpose of making rules, in relation to incorporated friendly societies, which give effect to any provision about winding up in the Parts of the 1986 Act described in paragraph (5);

(c)

sections 14(2)(a), 16 and 17(1), (2) and (3) of the 2000 Act (insolvency and winding up) for the purpose of making provision by regulations about the winding up of—

(i)

limited liability partnerships; and

(ii)

oversea limited liability partnerships,

by applying or incorporating, with such modifications as appear appropriate, rules made under section 411(1)(b) and (2) of the 1986 Act which give effect to any provision about winding up in the Parts of the 1986 Act described in paragraph (5)12 or the EU Regulation.

(4)

The Parts of the 1986 Act are—

(a)

Part 4 (winding up of companies registered under the Companies Acts);

(b)

Part 5 (winding up of unregistered companies);

(c)

Part 6 (miscellaneous provisions applying to companies which are insolvent or in liquidation); and

(d)

Part 7 (interpretation for First Group of Parts), so far as it relates to Parts 4, 5 or 6.

(5)

The Parts of the 1986 Act are—

(a)

Part 4 (winding up of companies registered under the Companies Acts);

(b)

Part 6 (miscellaneous provisions applying to companies which are insolvent or in liquidation); and

(c)

Part 7 (interpretation for First Group of Parts), so far as it relates to Part 4 or Part 6.

General modifications of enactments3.

(1)

Section 117 of the 1998 Act13 (general modification of enactments: Ministers of the Crown) applies in relation to the exercise of functions by the Scottish Ministers by virtue of article 2 as it applies in relation to the exercise of functions by the Scottish Ministers within devolved competence.

(2)

In the application of that section by virtue of this article, the reference in it to any pre-commencement enactment is to be read as if it were a reference to any enactment.

Rules and regulations made by the Scottish Ministers4.

(1)

Section 411(4) of the 1986 Act does not apply in relation to rules made by the Scottish Ministers by virtue of article 2(3)(a) or (b).

(2)

Rules made by the Scottish Ministers by virtue of article 2(3)(a) or (b) are subject to the negative procedure (see section 28 of the 2010 Act).

(3)

Section 411(5) of the 1986 Act does not apply in relation to regulations made under rules made by the Scottish Ministers by virtue of paragraph 27 of Schedule 8 to the 1986 Act14 and article 2(3)(a) or (b) (but see section 30(2) of the 2010 Act15).

(4)

Section 17(1), (4) and (6) of the 2000 Act do not apply in relation to regulations made by the Scottish Ministers by virtue of article 2(3)(c).

(5)

Subject to paragraph (6), regulations made by the Scottish Ministers by virtue of article 2(3)(c) are subject to the negative procedure (see section 28 of the 2010 Act).

(6)

Regulations made by the Scottish Ministers under section 14(2)(a) and 16 of the 2000 Act in the circumstances set out in section 17(5) of that 2000 Act16 are subject to the affirmative procedure (see section 29 of the 2010 Act).

Devolved functions shared by the Scottish Ministers and a Minister of the Crown5.

(1)

Subject to paragraph (2), the functions of the Scottish Ministers described in paragraph (3) are exercisable by a Minister of the Crown concurrently with the Scottish Ministers.

(2)

A Minister of the Crown may exercise a function mentioned in paragraph (1) only with the agreement of the Scottish Ministers.

(3)

The functions are those conferred by—

(a)

section 411(1)(b) and (2) of the 1986 Act17 (company insolvency rules) for the purpose of making rules which give effect to any provision about winding up in the Parts of the 1986 Act described in paragraph (4) or the EU Regulation;

(b)

section 411(1)(b) and (2) of the 1986 Act as applied by section 23 and paragraph 69(1)(a) of Schedule 10 to the 1992 Act18 (insolvency rules and fees) for the purpose of making rules, in relation to incorporated friendly societies, which give effect to any provision about winding up in the Parts of the 1986 Act described in paragraph (5);

(c)

sections 14(2)(a), 16 and 17(1), (2) and (3) of the 2000 Act (insolvency and winding up) for the purpose of making provision by regulations about the winding up of—

(i)

limited liability partnerships; and

(ii)

oversea limited liability partnerships,

(4)

The Parts of the 1986 Act are—

(a)

Part 4 (winding up of companies registered under the Companies Acts);

(b)

Part 5 (winding up of unregistered companies);

(c)

Part 6 (miscellaneous provisions applying to companies which are insolvent or in liquidation); and

(d)

Part 7 (interpretation for First Group of Parts), so far as it relates to Parts 4, 5 or 6.

(5)

The Parts of the 1986 Act are—

(a)

Part 4 (winding up of companies registered under the Companies Acts);

(b)

Part 6 (miscellaneous provisions applying to companies which are insolvent or in liquidation); and

(c)

Part 7 (interpretation for First Group of Parts), so far as it relates to Part 4 or Part 6.

Transitional provision for functions conferred on a Minister of the Crown and the Scottish Ministers6.

(1)

Anything done (or having effect as if done) by or in relation to a Minister of the Crown for the purposes of or in connection with the functions conferred on the Scottish Ministers by virtue of article 2, if in force at the time when that conferral takes effect, is to have effect as if done by or in relation to the Scottish Ministers (as well as the Minister of the Crown) in so far as that is required for continuing its effect after that time.

(2)

Anything done (or having effect as if done) by or in relation to the Scottish Ministers for the purposes of or in connection with the functions conferred on a Minister of the Crown by virtue of article 5, if in force at the time when that conferral takes effect, is to have effect as if done by or in relation to a Minister of the Crown (as well as the Scottish Ministers) in so far as that is required for continuing its effect after that time.

Name

Clerk of the Privy Council

EXPLANATORY NOTE

(This note is not part of the Order)

This Order is made under section 63 and section 108 of the Scotland Act 1998 (c.46) (“the 1998 Act”).

Article 2 of this Order provides that specific insolvency functions which relate to reserved matters under Schedule 5 to the 1998 Act, that are exercised by a Minister of the Crown in or as regards Scotland, are to be exercisable by both the Scottish Ministers and a Minister of the Crown. The specific insolvency functions to which this article applies are the making of winding up rules for Scotland in relation to companies under section 411(1)(b) and (2) of the Insolvency Act 1986 (c.45) (“the 1986 Act”), the making of winding up rules for Scotland which apply to incorporated friendly societies under section 411(1)(b) and (2) of the 1986 Act (as applied by paragraph 69 of Schedule 10 to the Friendly Societies Act 1992 (c.40) (“the 1992 Act”)) and the making of regulations for Scotland under section 14(2)(a), 16 and 17(1), (2) and (3) of the Limited Liability Partnerships Act 2000 (c.12) (“the 2000 Act”) for the purpose of applying winding up rules made under section 411(1)(b) and (2) of the 1986 Act in relation to winding up of limited liability partnerships and oversea limited liability partnerships. The agreement of a Minister of the Crown is required for the exercise of the concurrent powers so conferred on the Scottish Ministers.

Article 3 provides for the general modification of enactments in connection with article 2 of this Order.

Article 4 provides for the parliamentary procedure or laying arrangements which apply to any rules or regulations made by the Scottish Ministers under the powers conferred by article 2. The effect of section 27(2)(a) of the Interpretation and Legislative Reform (Scotland) Act 2010 is that any instrument which is made by the Scottish Ministers by virtue of the powers conferred on them under article 2 will be a Scottish statutory instrument (as opposed to a statutory instrument).

Article 5 of this Order provides for specific insolvency functions within the devolved competence of the Scottish Ministers to be exercised by both the Scottish Ministers and a Minister of the Crown. The specific insolvency functions to which this article applies are the making of winding up rules for Scotland in relation to companies under section 411(1)(b) and (2) of the 1986 Act, the making of winding up rules for Scotland which apply to incorporated friendly societies under section 411(1)(b) and (2) of the 1986 Act (as applied by paragraph 69 of Schedule 10 to the 1992 Act) and the making of regulations for Scotland under section 14(2)(a), 16 and 17(1), (2) and (3) of the 2000 Act for the purpose of applying winding up rules made under section 411(1)(b) and (2) of the 1986 Act in relation to winding up of limited liability partnerships and oversea limited liability partnerships. The agreement of the Scottish Ministers is required for the exercise of the concurrent powers so conferred on a Minister of the Crown.

Article 6 makes transitional provision in relation to the transfer of functions under articles 2 and 5.