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for specific reports and conduct of meetings) probably don’t work in VA’s created after the Rule has actually been repealed.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)

SIP 6 and minimum notice periods

Continuing my series of observations on the implications of the new Rules, I have just finished working through a simple question – should I give creditors anything more than the minimum notice on s.100 decisions?

The simple answer is “no”; the old SIP 8 requirement to issue the notices to members and creditors at the same time has been removed and so, certainly, the SIP committee doesn’t think so. But there are other related issues such as –

Q. Can one use a portal to deliver the statement of affairs and SIP 6 documents? A – No to the first, yes to the second.

Q. Can one can safely issue the notice of the meeting in the minimum period (five business days) but leave the statement of affairs until two days later? A – arguably not advisable.

Q. When should I issue the Gazette notice? A – tricky.

Q. Are you sure the RPBs will agree with you? A – No, but I think the arguments I have put forward make enough sense to rely upon, at least until there is any new guidance.

For a more detailed discussion of the pro’s and con’s, you can read my advisory note on the subject, here.


Going paperless

I first saw a paperless system as an ICAEW reviewer back in 2006, and I hated it! It was slow, cumbersome, difficult to read, didn’t index properly and as for integrating with standard documents, forget it!

Happily, things have improved a lot; us reviewers probably still take longer with them than with paper, but they are as quick as paper for the real-time user and with a laptop, just as convenient. They have become a definite cost saving option, but with the new rules from 2016, and HMRC and the Redundancy Service requiring electronic filing, I believe they are no longer an option, but will increasingly be a necessity. Firms which don’t move away from paper will risk more and more pressure on costs and also on regulation. The RPBs will be under pressure to report back on the success of the new rules on streamlining the insolvency world – woe betide you if you are seen to be lagging behind.

This first blog gives a broad review of the different stages of paperless operation that you can aim for, a useful order in which to approach and some key elements to plan around.  Future blogs will report on these stages in some more detail, with hopefully helpful comments from my clients and friends.

Stage 1 – internet reporting

I start here, because this is the bit which the insolvency legislation specifically provides for – it’s relatively inexpensive to set up and the cost savings are immediate.

To take full advantage, you should have a website with its own embedded “portal”. Alternatively,  or you can use a general portal that offers a secure publishing service on a separate site. Take a look at Creditor Portal, Creditor Gateway and Turnkey all do one; as I understand it, Creditor Gateway seem to offer the widest range of options, but do talk to them all).  These facilities will deliver good savings even now, but from 2016, once you have notified creditors of the internet address to look for reports, you won’t have to write to them again, except on dividends.

While the less immediately expensive route seems to be to use an independent portal, there are great advantages to embedding the portal in a special page on your own website.  You can then put all your creditor guides, fees policies, terms and conditions on the same page. This not only saves hassle; it avoids those embarrassing  moments when an RPB reviewer points out that your administrators either forgot to attach the SIP 9 creditor advice or used an outdated version.

And there is an additional benefit in terms of credibility. People regard the existence of a well-designed and managed internet site as a measure of your professionalism. Creditors who visit the site and see a well presented expression of your professional values may tend to reach less quickly for the Insolvency Service complaints number and, if suitably impressed, may even remember you when they or a friend is in trouble.

Stage 2 –Integrated cash book, diary and document templates

Step up, my old “friend” IPS and the old “new” kid on the block, Insolv, or as it is now known, Vision Blu. While there are still a few firms that use Excel perfectly well for cashiering and other functions, these integrate systems are delivering more and more. Each has its pro’s and cons; at present, I tend to recommend the Vision Blu system, if only because it comes with complete document templates.  However, at time of press, I am not aware of how they plan to tackle the new Rules, so make sure you ask.

Of course, you can go to my old friends Bill and Gareth at Compliance on Call, to get their templates. There are a couple of other providers out there as well, but Compliance on Call can still rightfully boast to offer the “gold standard”, and I think it is up to the others to show whether they can compete[1].

Stage 3 – “Fully” paperless

Actually, there is quite a lot of variation on the paperless theme. Some firms have gone so far along this road that they actually penalise employees for any paper retained on desks (Yes – really. It’s the modern equivalent of the swear tin). Others I have seen use their paperless system to store all documents, but maintain a paper permanent file for a quick, handy reference.  Some have succeeded in finding a way to index email traffic and integrate it into their general storage; others keep the two systems separate (though I do think that carries a risk).

The main issue is one of planning and testing. Give yourself plenty of time to research the market and then try the system out in parallel with your paper system to begin with. Some hard negotiation might get you a deal whereby, if it doesn’t work to your satisfaction, you get at least part of your money back.

Both IPS and Vision Blu offer paperless systems that are supposedly fully integrated with their document and case management packages, but I have heard some odd stories, so do make sure the contract commits them to make it work. And do check that their system really does do what you want. But you may find that a system from an independent provider suits you better – it shouldn’t be a problem but if you go with another provider make sure that the contract specifies that the integration is their responsibility, not yours.

Actually, I have to say that this is an area where I think it pays to hire an IT consultant who specialises in data management. They can help to make sure that everything works well together form document creation, to scanning and indexing, to placing documents on the portal, etc.

Stage 4 – Electronic case control

I am amazed at how many people still use paper file reviews – printing out a 6 month review form, then completing and signing it in paper, sometimes then scanning it into their “paperless system” and then doing it all again from fresh, 6 months later.

Though not necessarily easy, one can develop a pretty sophisticated real time case management system in Excel, that facilitates cost estimates, tracks accruing time costs, facilitates investigation work, provides a ready reckoner for bonds and dividends and produces regular 6 monthly reports, too.  I know this because I developed such a package a couple of years back – it’s been road-tested by one client, with no (major) complaints so far. Yours, for a price, etc.

Stage 5 (or 2) – Electronic meeting platforms.

Theoretically, one can go over to remote meetings now, and there can certainly be cost savings, but I have heard quite varied reports on how easy it is to comply with all the rules, so I wouldn’t rush to do them just yet. However, they will become a required part of our work from 2016 forwards, so you should make room in your diary to do the research, soon. That said, I hope to issue  a specific article on them soon.

Stage 6 – The fully e-office(s)

Just a brief mention of this. I have two friends with pretty successful small firms somewhere in the South of England – though one of them is occasionally running everything from the South of France (right now, in fact). Their use of a new internet based service is enabling them to achieve really impressive savings in everything from office rental to stationery and staff costs. I’ll be doing a feature on the service in my next newsletter, so stay in touch.

[1] And no, no money changed hands in relation to that testimonial.