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Practitioner Response to Consultation on Petition Reform

January 29 2012

TO: Maria Isanzu (policy.unit@insolvency.gsi.gov.uk), Policy Directorate, The Insolvency Service,
Zone B, 3rd Floor, 21 Bloomsbury Street, London WC1B 3QW.

Dear Sirs,

We write to provide a practitioner response to the November 2011 Consultation on Petition Reform. We are a City of London law firm which represents numerous clients (companies and partnerships) from throughout England & Wales whom face winding up petitions. We are aware of the Department for Business Innovation and Skills’ Insolvency Service’s consultation paper proposing to streamline the bankruptcy and compulsory winding-up application process. We submit our response to the consultation as follows.

Whilst the electronic submission of petition applications is entirely sensible, the problem with the proposals is that they represent an absolute and unexpected innovation (not a ‘streamline’ at all) in seeking to appoint an ‘Adjudicator’ (of the Insolvency Service) to process insolvency applications as opposed to judicial oversight by a Registrar (of the Companies Court). This appears to be an attempt to remove the Court from the process in large numbers of bankruptcy and winding up petitions. The proposal is that where there is no dispute between the parties (which it seems is only revealed by a defended petition), the Court would be completely removed from the bankruptcy or winding up process which in effect would become somewhat automated and lacking proper independent judicial discretion.

We act regularly for individuals, partnerships and companies facing petitions (and for parties who bring such petitions) and we are dismayed that judicial scrutiny in these matters is being intimated as unimportant when in fact it is paramount. Those who exercise the power to petition for the winding up of businesses or the bankruptcy of individuals should have their actions judicially monitored and scrutinised and those who face such petitions ought to enjoy full access to the body of legal remedies and rights of redress available via the Courts.

Please keep us advised of any further developments in this matter and note we are content for you to publish this response.

Yours faithfully,

Mr. M. Ali Akram, windinguppetitionsolicitors.co.uk,
LEXLAW Solicitors & Advocates, 4 Middle Temple Lane, Temple, London EC4Y 9AA.

The closing date for responses is scheduled to be 31 January 2012. You can write to your MP about these proposals and respond directly to the consultation by letter, fax or email to: Maria Isanzu, Policy Directorate, The Insolvency Service, Zone B, 3rd Floor, 21 Bloomsbury Street, London WC1B 3QW. Tel: 020 7291 6733 | Fax: 020 7291 6746 | Email: policy.unit@insolvency.gsi.gov.uk

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