The new rules which will guide insolvency practice are to come into force on 6 April 2017. The Insolvency Rules 2016 have been introduced to consolidate the Insolvency Rules 1986 and their numerous amendments into a single instrument, to update them in terms of their language and style of drafting, and to reflect modern business practice and make the insolvency process more efficient.
Changes include enabling electronic communications with creditors, removing the automatic requirement to hold physical creditors 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 government says that the efficiency savings delivered by the new rules will result in lower costs in dealing with the administration of an insolvency which should lead to better returns for creditors.
The rules will apply in England and Wales. A parallel project to modernise the Scottish insolvency rules is currently underway with the Scottish Government.