Yesterday (27 April 2020) consultations opened for comments on the proposed changes to SIP 3.1 and 3.2 IVA’s and CVA’s respectively, SIP 7, Presentation of financial information in insolvency proceedings and SIP 9, Payment to office holders and their associates.
The consultations are open for 12 weeks, closing on 20 July 2020.
The Joint Insolvency Committee (JIC) have stated that there is no intention to amend the SIPs without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by the insolvency profession.
The changes focus on SIP 3.2, CVAs, in light of the media attention the process has received, specifically in relation to the retail sector. The main changes cover the content of the proposals, with some minor additions in information to be provided to directors at the outset and adequate time given to creditors to consider the proposal.
These changes have been mirrored in SIP 3.1 (and SIP 3.3 for Scottish Trust Deeds) without a full review of their impact, specifically on an IVA.
SIP 7 and 9
In 2019 the JIC was asked to review SIP 9 by The Insolvency Service specifically in relation to the recharging of disbursements in the volume IVA sector and whether this provided real value to debtors or creditors. A JIC working party reviewed the SIP and found that certain areas could be clarified and/or refined;
> The treatment of per case fees” charged to the estate as an expense or disbursement.