Changes to SIP 3 and SIP 9

At the Joint Insolvency Committee meeting held on 20 June 2011, the Recognised Professional Bodies, the Insolvency Service and the Insolvency Service Northern Ireland agreed that, as an interim measure pending issue of revised SIPs, certain provisions of SIP 3 and SIP 9 should be relaxed to allow for changes in practice. 

SIP9 is currently under review and SIP3 has been identified for review shortly. The details are:

SIP 3

Paragraph 3.8 requires that a copy of the R3 booklet “Is a voluntary arrangement right for me?” to be sent to debtors.  However, it is now common practice (and expected by OFT) for debt management companies to provide the Insolvency Service booklet “In debt – dealing with your creditors”.  As a result, there could be circumstances where a debtor receives both booklets.

It has been agreed that it would be appropriate for either booklet to be used by insolvency practitioners. 

SIP 9

In certain circumstances, where an office-holder is replaced or where an office-holder takes a sequential appointment (for example, if a CVL follows administration), further approval is not required for the basis of remuneration.  The way in which Category 2 disbursements are approved is, of course, separate and, in the circumstances described, under the current SIP further approval would be needed for these disbursements.

It has been agreed that if an office-holder has obtained approval for the basis on which a charge for Category 2 disbursements is made, that basis may continue to be used where further approval of the basis of remuneration is not required.

The position of insolvency practitioners

With immediate effect, ICAEW and the other authorising bodies will interpret SIPs 3 and 9 for monitoring purposes as if they had been amended to take account of the above matters. The versions of SIP 3 and 9 on our website will be amended soon to note these changes.

Insolvency Group, July 2011