Two years ago we were all scrambling around, working out what we could and absolutely could not do as insolvency professionals. Almost subliminally, time has been chipping away at those CIGA-based restrictions, and tomorrow (31 March) marks the end of all temporary legal constraints imposed upon us. We will be like sex offenders released from jail on Friday morning, (or, more properly and entirely unconnectedly, like kids at 4.30am on Christmas morning). The wait is finally over.
You do not need the NTI newsroom to tell you that the Corporate Insolvency and Governance Act 2020 introduced various temporary measures to help protect companies affected by the lockdown restrictions during the pan ... blah, blah, blah. Most of those measures expired at the end of June and September 2021 and you can be forgiven for thinking they had all been consigned to a very odd section of our history. However, restrictions on winding up companies were extended until 31 March 2022. Tomorrow.
Finally, this remaining insolvency restriction will not be extended further, allowing the insolvency regime to return to normal; we will welcome back winders with the joy of the wife of an Amercian GI who has moved on to her neighbour and now, with horror, sees her long-lost husband coming through the front gate.
But it's not all old news, some of it is new. On 24 March Business Minister Paul Scully announced the ‘Commercial Rent (Coronavirus) Act 2022’ received Royal Assent. This means that from last Thursday a legally binding arbitration process will be available for eligible commercial landlords and tenants who have not already reached an agreement. This will resolve disputes about certain pandemic-related rent debt and help the market return to normal as quickly as possible (Paul says).
The law applies to commercial rent debts of businesses including pubs, gyms and restaurants which were mandated to close, in full or in part, from March 2020 until the date restrictions ended for their sector. Debts accrued at other times will not be in scope.
Paul said: "Landlords and tenants should keep working together to reach their own agreements where possible using our Code of Practice to help them, and we’ve made arbitration available as a last resort. Tenants who can repay their rent debts in full, should do so, and when they cannot, landlords should try to share the burden, so we can all move on." Also known as; sort yourselves out; your Mum and I aren't interested in your constant whingeing.
NTI have previously published the Government Code of Conduct covering this area, but we can see by the grimmace on your face that you need to be reminded of this. The Code sets out that tenants who can pay their rent debt in full should do so, and that in the first instance, tenants unable to pay in full should negotiate with their landlord in the expectation that the landlord shares the burden where they are able to do so, and only as far as necessary, by waiving some or all rent arrears or giving time to pay.
So there. Welcome to the new world. Tomorrow.