Under current Insolvency Law an Insolvency Practitioner (IP) has certain record keeping obligations which require them to maintain “at least the information specified in Schedule 3 to these Regulations as is applicable to the case”. This is commonly known as the IP record and is kept on every case file.
The Regulations then expand on this and state that: “where at any time the records referred to in paragraph (1) do not contain all the information referred to in Schedule 3 as is applicable to the case, the (IP) shall forthwith make such changes to the records as are necessary to ensure that the records contains all such information”.
The content of Schedule 3 also includes the 15 sub headings of required information, which include:
- Details of the IP
- Details of the insolvent
- Progress of administration
- Bonding arrangements
- Matters relating to remuneration
- Disqualification of directors
- Vacation of office
- Distribution to creditors
- Statutory returns
- Time recording.
On 27 February 2015, the Government passed new laws which will be coming into force on 1st October 2015. The reason for these changes is to simplify an IP’s record-keeping requirements and to avoid duplication of records.
Therefore from October 2015, the requirements will be replaced with a more general requirement to maintain records sufficient to show and explain:
– The work they and their staff undertake in the course of the ‘administration’ of an insolvency appointment.
– The decisions that may ‘materially affect’ the appointment.
This will also mean that IPs will also no longer be required to inform their Recognised Professional Body (RPB) the location of where their records are kept for each case. When this change comes into force it is anticipated that the RPBs will bring changes and create their own rules regarding where all records relating to appointments should be located, as part of their general membership rules.
Whilst the notification requirements will be relaxed it would also be a good idea for all IPs to remember the obligation to notify a competent authority as to where the records are kept under Section 392 of The Insolvency Act 1986.