Technical Update September

Technical update September 2012 This technical update covers the new SIP 9, rent payable by a provisional liquidator, rejection of administrator’s proposal, administration appointment after the 10 day moratorium expires, third party funding and confirmation of the principles in Joners V Kernott.

New SIP 9 effective 1 November 2011

The new SIP 9 was published in November 2011 and I believe we are all still trying to work out how this needs to be implemented in day-to-day case work.

I have highlighted a few of the key issues below which you need to be aware of.

MILEAGE SIP 9.18.b
The SIP clearly identifies mileage as being a category 2 disbursement and therefore needing a specific resolution before this may be paid. I would suggest reviewing your disbursement policy document and making sure that mileage is easily identified and the basis of the re-charge is clearly explained. You may also need to review the time management and disbursement system you use so that you do not mistakenly pay this as a category 1 disbursement.

CHANGES TO CHARGE-OUT RATES SIP 9.16
The need to only report on material changes to charge-out rates has been removed and firms now need to report all changes to charge-out rates. If you have a web page for the guide to creditors fees and your disbursement policy then I would add a table with historic information about charge-out rates here and then give details of the link in all reports sent.

SUB-CONTRACTED WORK SIP 9.11 & 9.17
Sub-contracted work needs to be disclosed in all reports, either your intention to sub-contract work or details of work that has been sub-contracted out.

POLICY FOR RECOVERING COST OF SUPPORT STAFF SIP 9 Appendix 5.a
Irrespective of whether you do, or do not, charge support staff time to a case you must provide information about what your policy actually is and I would suggest you detail this in your disbursement policy document.

MINIMUM CHARGEABLE UNIT SIP 9 Appendix 5.a
It has been stated that the minimum unit that should be used by IP’s is 6 minutes and if you currently re-charge time in minimum units greater than 6 minutes I would suggest you review your policy and seek to change it. Now that a bench mark has been set it will be easier for creditor’s to challenge IP’s fees if a greater unit is used.

CATEGORY 2 DISBURSEMENTS AND SEQUENTIAL APPOINTMENTS SIP 9.22
The only good news in the new SIP 9 guide is that once you have a category 2 disbursement resolution then this will carry over from Administration into CVL.

I would recommend reading SIP 9 thoroughly as the onus has been placed firmly back with IP’s to ensure that they provide adequate information to creditors for them to be able to meaningfully assess whether fees are proportionate to the work.