Out of Court Administration Appointment Reform: Hardy Solution or Another Fine Mess?

The Enterprise Act 2002 introduced significant reforms to the Administration process, including the streamlined out-of-court appointment process pursuant to paragraphs 14 and 22 of Schedule B1 of the Insolvency Act 1986. Following these reforms, a number of issues arose with regard to the impact of procedural irregularity on the appointment of administrators. Following a number of cases at first instance which reached a variety of conclusions, reform to both the Insolvency Act 1986 and the related Insolvency Rules were proposed.

The paper considers the current technical requirements under the Insolvency Act 1986 and the related Insolvency Rules and the potential effects of the proposed reforms. The manner in which the courts have considered and interpreted these requirements is reviewed and it is suggested that the current position has come about as a result of a mis-interpretation of the underlying requirements. It is also be suggested that the proposed reforms, to both the primary and secondary legislation, may exacerbate rather than resolve the current difficulties.