The Smart Meter Communication Licensee Administration (England and Wales) Rules 2020

EXPLANATORY NOTE

(This note is not part of the Rules)

These Rules set out the procedure for the conduct of smart meter communication licensee administration (“SMCL administration”) proceedings in England and Wales. SMCL administration is a special insolvency regime specifically created for companies acting as a smart meter communication licensee (“SMCL”) in Great Britain.

The framework for the SMCL administration regime is set out in the Smart Meters Act 2018 (c. 14) (the “2018 Act”). The 2018 Act applies (with modifications) much of Chapter 3 of Part 3 of the Energy Act 2004 (c. 20), which provides for a special insolvency regime for energy companies that run and operate gas and electricity networks in Great Britain.

Only SMCLs as defined in section 2(5) of the 2018 Act may enter SMCL administration. These are companies that hold a licence granted under section 7AB of the Gas Act 1986 (c.44) or a licence granted under section 6 of the Electricity Act 1989 (c.29) to provide a smart meter communication service.

The SMCL administration process is commenced by an application to court for a smart meter communication licensee administration order, referred to as an “SMCL administration order” as defined in section 2(1) of the 2018 Act. Such an application can be made by either the Secretary of State or, with the consent of the Secretary of State, by the Gas and Electricity Markets Authority.

An insolvency practitioner appointed to manage the affairs, business and property of the SMCL is defined in section 2(2) of the 2018 Act as an SMCL administrator.

These Rules are applicable only to SMCL administration.

Part 1 of these Rules contains the construction and interpretation provisions.

Part 2 of these Rules sets out the procedure to be followed to initiate SMCL administration proceedings, including the information required for an SMCL administration order application, to whom notice of such an application needs to be delivered and who may appear at a hearing of the SMCL administration application.

Part 3 of these Rules details the initial steps to be taken in SMCL administration proceedings. These include the notification and advertisement of an SMCL administrator’s appointment and the preparation of a statement of the affairs of the SMCL. Part 3 also sets out the information that must be given to creditors in the SMCL administrator’s statement of proposals and the contents of the progress reports to be prepared by the SMCL administrator.

Part 4 of these Rules contains provisions relating to creditors’ and company meetings summoned by the SMCL administrator.

Part 5 of these Rules contains provisions relating to an application to court for authority to dispose of property of the SMCL which is subject to a security (other than a floating charge) or goods in the possession of the SMCL under a hire-purchase agreement.

Part 6 of these Rules contains provisions relating to the expenses of SMCL administration.

Part 7 of these Rules contains provisions relating to claims by and distributions to creditors of the SMCL. In particular, this Part details the procedure to be followed to prove a debt in the SMCL administration proceedings as well as the way in which such debts will be quantified and the steps to be taken where the SMCL administrator makes, or proposes to make, a distribution to creditors.

Part 8 of these Rules contains details of how the remuneration of an SMCL administrator is to be fixed by the court.

Part 9 of these Rules sets out the arrangements for ending an SMCL administration. There are specific provisions detailing the ending of an SMCL administration by court order, as well as the process by which an SMCL administration moves into either a creditors’ voluntary liquidation or dissolution of the SMCL.

Part 10 of these Rules sets out the requirements and procedures for replacing an SMCL administrator. It includes provisions relating to the resignation of an SMCL administrator, the removal of an SMCL administrator from office by court order and the SMCL administrator’s duties on vacating office.

Part 11 of these Rules contains general provisions detailing the court procedure and practice for SMCL administration proceedings. In particular this Part sets out the general requirements for court applications made during an SMCL administration, enforcement procedures, access to the court file, the cost assessment procedure for SMCL administration proceedings, provision for persons who lack capacity to manage their affairs, and the appeals process to be used in SMCL administration proceedings.

Part 12 of these Rules contains provisions for the use of proxies and representatives of corporations at meetings held during an SMCL administration, including the rights of inspection of such proxies and the procedure to be followed where a proxy-holder has a financial interest in the outcome of a resolution to be voted on at the meeting.

Part 13 of these Rules sets out the provision for the examination of persons where an application to court has been made by an SMCL administrator under section 236 of the Insolvency Act 1986 (c. 45). Section 236 of the Insolvency Act 1986 allows an SMCL administrator to apply to court for an order requiring certain persons to appear before the court to be questioned by the SMCL administrator about the company in SMCL administration.

Part 14 of these Rules contains provisions of general effect including provisions relating to the delivery of documents, the form and content of documents, service of documents, standard contents of notices and of documents delivered to the registrar of companies, the inspection and right to copies of documents, and the calculation of time periods.

Part 15 of these Rules contains miscellaneous provisions, including the power of the Secretary of State to regulate certain matters relating to the carrying out of the SMCL administrator’s functions, provisions relating to the punishment of offences and the requirement for a review.

The Schedule to these Rules contains specific details of the punishment of offences under these Rules.

An impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.