One of the most immediate questions for IPs will be which process to use for appointment in a section 100 process – though at least the choice is simple; deemed consent or virtual meeting, only (see R. 6.14(2)).
At first, the advantages and disadvantages of the two appear pretty obvious –
Deemed consent – If not objected to, the appointment is immediate without any awkward messing about with voting. However fees, whether pre- or post-appointment, cannot be agreed other than by a meeting process, meaning that one must seek a separate fee resolution later.
Virtual meetings – allow one to get all the resolutions one might want at the outset, (providing there is a quorum, of course). The only immediate disadvantage is in costs; virtual meetings have to be advertised and there are going to be at least some other costs in providing the virtual service.
Up until now, I had been making what I thought was a sensible suggestion – Deemed consent for small, simple jobs, with no substantial assets or investigation needed; virtual meetings for anything else.
As time has passed, the potential problems with virtual meetings have been multiplying. Here are a few –
- The difficulties of ensuring there is a secure means of attending and voting at the same time.
- Extra difficulties surrounding the identification of participants – partly resolved by password access but one still needs to be careful.
- Finding a reliable platform or software system to do both a) and b) for attendance from all areas of the UK, regardless of quality of connection AND one which allows the voting to be completed quickly. So far, I haven’t heard of such a system that doesn’t involve prohibitive cost.
- Potential problems that could arise because either objections or complaints of exclusion made after the meeting could lead to reversal or variation of resolutions retrospectively (See my blog of 7 April, “Objections anyone?”).
I am recommending all my clients to use Deemed Consent in the first instance and not use virtual meetings until a reliable package comes along, and then only if their office has good broadband service. In doing so, prospective appointees should make sure their directors’ resolution contains a provision for an extra fee to be payable against costs of convening a physical meeting should that become necessary.
Of course, this does mean that one has to get one’s remuneration agreed separately, probably by correspondence, but we have been living with that issue in ADMs for several years, anyway. Not a perfect answer, I know, but the best I can give for now.