The new rules replace the Insolvency Rules 1986 and their 28 subsequent amendments, updating the language and modernising them to take account of the changes resulting from the Deregulation Act 2015 and the Small Business, Enterprise and Employment Act 2015. In particular, there are amendments enabling modern methods of communication and decision making to be used in place of paper communications and physical meetings.

The Insolvency Service says the aim is to reflect modern business practice and to make the insolvency process more efficient.

Changes include:

• enabling electronic communications with creditors;
• removing the automatic requirement to hold physical creditors meetings
• although creditors will be able to request meetings; enabling creditors to opt out of further correspondence
• and for small dividends to be paid by the office holder without requiring a formal claim from creditors

The rules have been restructured, for example by separating out the winding-up provisions into three separate parts for members’ voluntary liquidation, creditors’ voluntary liquidation and compulsory liquidation. Undue repetition has been avoided through the greater use of common parts that apply to multiple insolvency procedures.

The rules will apply in England and Wales. A parallel project to modernise the Scottish insolvency rules is currently underway with the Scottish government. The Insolvency Service says it is continuing to work on consequential amendments to other related legislation, including the insolvent partnerships order.

The Insolvency Service says it will shortly launch an online community for professional who want to questions of its technical team and share comments with other insolvency professionals.

Details of the statutory instrument are here.

The explanatory memorandum is here.