UK Parliament
Corporate Insolvency and Governance Bill 2019-21 - first reading in the House of Commons - 20 May 2020
The Corporate Insolvency and Governance Bill 2019-21 has had its first reading in the House of Commons. The Bill aims to provide businesses with additional flexibility to comply with legal obligations in light of the COVID-19 pandemic. If the Bill becomes law, among other things, it would introduce:
- measures to provide companies and other qualifying bodies with temporary easements on certain company filing obligations and requirements relating to AGMs and other meetings; and
- a provision suspending the period during which a company’s directors could incur personal liability for an action by a liquidator or an administrator for wrongful trading with effect from 1 March to 30 June 2020;
The Bill also aims to introduce measures to provide greater flexibility for companies to explore different rescue options and temporarily protect companies from aggressive creditor action, including a new statutory moratorium process, a new restructuring plan procedure and restrictions on the presentation of debt-related winding-up petitions.
The Bill’s second reading in the House of Commons is scheduled for 3 June 2020.
Corporate Insolvency and Governance Bill 2019-21
Webpage
Bank of England
Data collection in the UK financial sector - Bank of England updates webpage on review - 21 May 2020
The Bank of England has updated its webpage on its Discussion Paper on transforming data collection in the UK financial sector, which was published in January 2020. The updated webpage confirms that the deadline for responses to the Discussion Paper has now closed and this brings an end to the first phase of its review of the hosting and use of regulatory data which was announced in response to recommendations in its June 2019 ‘The future of finance’ report.
The webpage states that the next phase of the review will consist of a series of stakeholder and industry engagement meetings to shape the feedback it has received into a transformation plan for data collection. These meetings are expected to be held in July, September and October 2020.
Bank of England webpage on transforming data collection in the UK financial sector
Financial Services Compensation Scheme
Annual levy 2020/21 - announced by FSCS - 21 May 2020
The Financial Services Compensation Scheme (FSCS) has announced that its final levy for 2020/21 will be £649 million. This represents an increase of £14 million on the figure included in its Plan and Budget for 2020/21, which was published in January 2020. The FSCS confirms that the total amount of FSCS management expenses will be £74.7 million.
The FSCS has also published its May 2020 Outlook newsletter.
Press release: FSCS announces annual levy for 2020/21
FSCS May 2020 Outlook Newsletter
Recent Cases
Gregory and others v A.R.G. (Mansfield) Ltd, [2020] EWHC 1133 (Ch), 7 May 2020
Validity of appointment of administrators without FCA consent - section 362A FSMA 2000 - Schedule B1 to the Insolvency Act 1986
The High Court has delivered a ruling considering the consequences of a defect in the appointment of administrators, where the need for FCA consent prior to the appointment was not appreciated at the time of filing the notice of appointment. The question before the Court was whether the lack of FCA consent at that time amounts to a curable or incurable defect.
A.R.G. (Mansfield) Ltd entered into administration in January 2020. However, following a search on the FCA Register in March 2020, the administrators found that the company was registered as an Appointed Representative, a fact that had not been originally picked up because it was registered without the addition of full-stops in its name. Section 362A FSMA 2000 and paragraph 29 of Schedule B1 to the Insolvency Act 1986 require that the FCA, as the “appropriate regulator”, gives consent before an appointment of administrators becomes effective. The FCA granted retrospective consent to the appointment on 5 March 2020.
Having examined previous conflicting decisions in Re M.T.B. Motors Limited [2010] EWHC 3751 (Ch) (which rendered such a purported appointment void) and Re Ceart Risk Services Limited [2012] EWHC 1178 (Ch) (which considered that a lack of regulator consent was not so fundamental so as to invalidate the appointment but that the appointment took effect from the date consent was filed), David-White QC HHJ held that section 362A of the FSMA 2000 and paragraph 29 of Schedule B1 to the Insolvency Act 1986 require that written consent from the regulator must be obtained and lodged at the latest by, and with, the filing of the notice of appointment and that, in his view (obiter), the appointment of administrators in the absence of FCA consent constitutes an incurable defect.
However, the Court followed the practical approach in Petit v Bradford Bulls (Northern) Limited [2016] EWHC 3557 (Ch) such that it made an order appointing the administrators with retrospective effect (to the date of their original purported appointment) and if, and to the extent that, their original purported appointment was only irregular and not a nullity, removing them as administrators under such appointment.
Gregory and others v A.R.G. (Mansfield) Ltd [2020] EWHC 1133
