LexisPSL Restructuring & Insolvency have worked in partnership with Phillip Patterson to create a new protocol for making and administering statutory declarations in insolvency proceedings by video conference. The protocol takes into account the Temporary Insolvency Practice Direction (TIPD) and assists practitioners with remote statutory declarations during the coronavirus (COVID-19) pandemic.
Why are remote statutory declarations necessary?
Statutory declarations are a necessary part of insolvency proceedings, most commonly where a company enters members’ voluntary liquidation (see section 89 of the Insolvency Act 1986 (IA 1986)) and where a company enters administration by an out-of-court appointment (see the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 3.17). The wording required when making statutory declarations is governed by the Statutory Declarations Act 1835, but conduct for making and administering them is largely customary. That custom dictates that the person giving the statutory declaration and the solicitor administering in it are in the same place.
In response to the coronavirus pandemic, the UK Government introduced social distancing rules in March 2020 which has made face-to-face statutory declarations problematic. To address this uncertainty, on 6 April 2020 TIPD was introduced.
TIPD, para 9 states that where IA 1986, Sch B1 requires a person to make a statutory declaration and that declaration is made by way of video conference then, provided certain steps are taken, any defect or irregularity arising solely from the failure to make the statutory declaration in person shall not by itself be regarded as causing ‘substantial injustice’.
The relevance of this is that IR 2016, SI 2016/1024, r 12.64 provides that the court may declare that any formal defect or irregularity will not invalidate the relevant insolvency proceedings, unless the court considers that ‘substantial injustice’ has been caused by the defect or irregularity which cannot be remedied by any order of the court. Therefore, if an appointment were challenged on the basis that the related statutory declaration had been carried out by video conference, the administrators and the appointor(s) would be able to rely on IR 2016, SI 2016/1024, r 12.64.
The TIPD expressly refers to statutory declarations made under IA 1986, Sch B1 ie in relation to the out-of-court appointment of administrators. However, there does not seem to be any principled basis for confining TIPD, para 9 to that specific use of a statutory declaration. It seems appropriate that the guidance given would be equally applicable to statutory declarations in other insolvency proceedings.
How should the protocol be used?
The use of technology provides several options for making a statutory declaration by video conference. The protocol provides alternative, hierarchical options for making and administering a statutory declaration by video conference. The options are not prescriptive or exhaustive; rather they suggest alternative methods of making the declaration.
Where can I access the protocol?
Practitioners with access to LexisNexis can access the protocol by clicking on the link below:
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