VA’s revisited – happy, happy, happy!

Yes, I know, compliance consultants are not meant to say they are happy with anything, but there’s always a first time –

My first happy is that, after taking a little time off for a nervous breakdown, I have completed my new review packages for VA’s* (except moratorium CVA’s – life really is too short).

My second happy, is that (with the exception of the initial decision process – see my earlier blog on that subject) I can say that the fundamentals of VA’s remain largely the same.

And my third happy is about the R3 standard terms. As stated on their website and flagged in Dear IP, a new set of R3 standard terms is expected imminently – in fact a rather authoritative bird has chirped about the second week of June. So, if you have a VA in preparation, now, see if you can hold it up until the amended terms become available.

But if you can’t do that, the same bird has warbled that R3 think the old standard terms are fit for purpose in any event. I am not sure that is entirely true, because references to specific Rules like 12A.12-23 (use of websites for specific reports and conduct of meetings) probably don’t work in VA’s created after the Rule has actually been repealed. Some might suggest that because the successor rules are rarely significantly different to the 86 Rules, that one can just apply the former under the supervisor’s general discretion at paragraph 15 of the standard terms, but I am a little cautious about whether the Courts would agree so easily.   That said, if you are worried and can’t wait for the new standard terms, then why not amend the proposals themselves, so that the standard terms are only adopted with the new rule references substituted (see standard terms paragraphs 10(3), 22(3), 30, 46(2), 59(3), 62A(3), 62B(2), 71(2)(c) being the ones I have spotted).

You see – happy, happy, happy…

(*copies of all my new review checklists are available to purchase (free to clients, of course) on application – just ring or email me)

A year of 366 days – a wrinkle to catch the unwary

This is a nasty little change because it will affect accounting periods not just in new appointments, but in transitional cases too.

While the rest of the world is content with years of 365 days as standard, the new insolvency rules have decreed that in any period stated to be in months, such as the 12 required for progress reports in most case types, the period ends with the same day of the month as it began with. Thus, if you are appointed on 12 May 2017, the period of the first progress report will end on the 12 May 20128 and not 11 May 2018 as you might otherwise suppose (see rule 1.3 and Schedule 5).

Much consternation surrounded this idea when it was first encountered, because of possible confusions when accounting for time. Would there not be a danger of double counting the time between reporting days?

In case you were worrying about this, a kind of salvation Is suggested by Rule 15.2 which states that any decision other than by meeting is to be treated as made at 23.59 on the date of decision. So, for an appointment made by deemed consent on 12 May, the time account will effectively run from 00:01 on 13th to 23:59 on 12th.

Now, the general opinion is that most future CVL appointments will be made by deemed consent. But ADM appointments most often take effect at a given time, and CVL appointments at meetings (for time accounting purposes, at least) should be treated as made at the time the meeting is convened.  So, does this mean we have to run time accounts from say, 2.00 on the first day to 1.59 on the last day of the period? At risk of being contradicted by one of my successors at QAD[1], I think the practical and safe solution is to run all time accounts to the end of the final report day, but effectively tag on the time post-appointment from the first day (which can be done by reliance on separate coding of pre-appointment time in generic systems).  Of course, that potentially means the whole day in appointments made by the Court or the Secretary of State, but as one rarely gets handover on the day of appointment, itself, this problem should (usually) prove academic.

Just be careful with your first and second reports in all cases after the new rules come in, because the new reporting period will affect old cases, too. You will need to make sure that you don’t inadvertently miss a day’s charge, or double count it, from getting your reporting days confused.

Clear?

[1] And if they do say I am wrong, at least you will have adopted a consistent policy based on my advice.

See you at the SPG?

R3’s annual SPG conference is on at Warwick next week and I’ll be there both to catch up on the latest technical updates and promote my new business UKIA. If you want to find out more about how our staff in India can work for you in the UK whether in general support or on case administration, come and see Patricia and I at our table outside the conference room, or catch me later over dinner or a drink.

See you there.

(Delayed) Preparations for the Consolidated Rules

The latest news is.. there is no news, but the rumours are that the new drafts won’t be ready in time to allow for implementation in October.

Yes, as you have probably already heard, the drafting process has become further drawn out and, as a consequence, we may not see the draft rules until well into April/May. Theoretically, this should mean that the implementation date will move from 1 October this year to 1 March 2017, but I am worried that the Insolvency Service are now so cowed by the cuts they have suffered that if the minister insists, then they will go ahead, regardless. It’s about the only reason that I am grateful for the referendum – in all that infighting, they might just forget us, for a while.

But, while that means that we won’t be able to start detailed preparations just yet, there remain a few important areas to look at in advance – get these things sorted and the task of taking in the new rules themselves should be a lot easier.

  1. Use of websites and portals to deliver creditor reports – it really does save on expense and there are a number of helpful and inexpensive sources of help available.
  2. Provisions for holding meetings remotely –while there are plenty of conference call systems out there, remember that you will need to find a secure method of identifying and recording creditors’ questions, comments and votes, especially in any case that might attract a challenge.
  3. Paperless systems – the latest offerings from companies like Virtual Cabinet and Invu are much better than they were a few years ago, and I believe that most firms will see positive cost savings from using them. But there are other products out there and it is worth shopping around. I have four tips –
  • Do divide the electronic records as you have done with paper files.
  • Make sure the system tracks and sorts your email traffic in real time. Some systems actually will prevent the email being sent unless it has been properly indexed to a file.
  • Make sure your server and broadband provisions are adequate. If you have more than one office and the broadband service is poor in some of them, you may be better advised to use small, local servers in those offices, to hold specific case records.
  • Get an IT consultant to work with you on choosing and implementing the system.

That’s all for now. Hopefully, we will get some further news, soon.