NI Blog: Insolvency legislation changes
David Menzies, director of insolvency at ICAS, explains recent changes to insolvency legislation in Northern Ireland.
A package of changes to modernise and strengthen the insolvency process in Northern Ireland come into effect on 1 April 2016.
A significant number of changes come into effect on 1 April 2016 which will impact on insolvency practitioners and the insolvency regulatory system in Northern Ireland. The changes are being introduced through commencement provisions to the Insolvency (Amendment) Act (Northern Ireland) 2016.
Many of the changes bring into effect in Northern Ireland equivalent provisions to those introduced in England, Wales and Scotland in October 2015.
The main changes affecting insolvency cases will:
Authorisation of Insolvency Practitioners
A new regime will allow for the partial authorisation of insolvency practitioners. Insolvency practitioners will be able to be authorised in relation solely to companies, solely to individuals or to both (fully authorised - as is currently the case).
Strengthening the regulatory framework
Measures are also being introduced to reform the regulatory regime for insolvency with the aim of strengthening the regulatory framework for IPs, thus providing greater confidence in the insolvency profession.
For the first time a set of regulatory objectives for the insolvency regime is introduced.
The Insolvency Order is also amended from 1 April 2016 to:
The regulatory objectives and sanctions apply for acts or omissions by RPBs in discharging their regulatory functions, or failure to comply with a new requirement, from 1 April 2016.
The power to apply to court to directly sanction an IP in the public interest applies to conduct on or after 1 April 2016, notwithstanding the date of appointment as office holder.
The Department will also be able to apply to court to secure compliance with a requirement that the Department has placed on an RPB.
A reserve power to establish a single regulator of IPs is also commenced.