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The New Insolvency Rules 2016


The new Insolvency Rules 2016 will come into force on 6 April 2017

The existing rules have been extensively amended over the years - 23 times since 1986 - in order to reflect ongoing changes in primary legislation, case law and policy. Regular additions and deletions of text have resulted in, what has been described as, an “impenetrable thicket” of legislation.

The new rules aim to do three things: firstly, to consolidate the existing rules and their amendments into a single set of rules; secondly, to modernise and simplify the language; and thirdly, to incorporate various changes in the law which are intended to reduce the burden of red tape. Some of the more eye-catching changes include:


Fewer physical meetings

A system of ‘deemed consent’ will be introduced, whereby an office holder will be at liberty to send out notices to creditors, probably via email (or some other method). If no objection is made to that proposal, agreement by the creditor will be assumed. Final meetings will be abolished entirely.


Creditors may opt of receiving notices regarding the insolvency. This may be attractive those creditors that are manifestly out of the money.

Small creditor claims

Creditors claiming less than £1,000 will no longer be required to submit a formal proof of debt. The office-holder will, instead, rely on the amounts listed in the account records or the statement of affairs of the company or individual.


Office-holders may use a website to host documents throughout an insolvency without a court order.

Company/director out of court administration appointments

The new rules clarify the requirement to give notice of an intention to appoint an administrator to certain prescribed persons. This notice must be given if a notice of intention to appoint has been sent to a qualifying floating charge holder, but not otherwise. This clarifies the position following conflicting decisions on the point. Although the underlying question of whether an administration appointment process that is flawed by errors in process is a nullity or can be remedied by the court is not settled.


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