Introduction

Gillian Thompson, the Accountant in Bankruptcy (“AiB”), held a meeting with Insolvency Practitioners (“IPs”) on 8 September 2004, to bring them up to date with developments in her office. The other staff from the Accountant in Bankruptcy’s office who attended were:

Derek Grant – Registration, Agents

Sandra Jack – Case Operations (Edinburgh)

Sharon Bell – Case Operations (Ayr)

Roz McCracken – Corporate Strategy

Relocation

Gillian Thompson advised that the AiB was now taking temporary accommodation in a business park near Irvine.  The decision on the final site is in the hands of Ministers.  Staff should start moving into the temporary site in November, after it has been refurbished.

Sharon Bell advised that 30 staff were coming to the office from other Scottish Office departments, but with no insolvency knowledge.  Thereafter there would be another 30 staff recruited in the New Year. The new staff would receive intensive training.  If IPs were able to help with training that would be appreciated. Initially the new staff would deal with Registration and minimal asset cases.  Then there would be a need to have more complicated cases – the staff can’t be trained without having the cases to do. Gillian Thompson advised it was the intention to “restore the balance” of cases allocated to IPs as agents and that they may go further than the previous 75:25 split. 

The temporary premises could accommodate about 72 staff. What the new staff lack in experience they make up for in enthusiasm.  Some are from the Agriculture and Rural Affairs Dept which was losing posts, and others from Glasgow and surrounds.

The post of Deputy Accountant in Bankruptcy has been advertised and they were now interviewing. It is hoped that some IPs will be brought in.

Sandra Jack said there had been a 30% staff loss at the Edinburgh office, but they were still meeting timetables.  The Edinburgh team would be in place for another 18 months, but it was not known how long they would remain in George House.  According to Gillian Thompson there were 94 staff just now, but only 56 were permanent. There was a block on staff transferring to other posts within the executive, unless these were promoted posts.  “Recognition” would take place as long as the block was in place. Only two of the existing staff – Jim Cook and Tom Denholm – were moving to Ayrshire.

Agents should continue to send mail to Edinburgh where it would be scanned and forwarded to Ayrshire as appropriate. In the short term the AiB did not anticipate any change in the allocation of cases between agents and her own office.

Business Update

“You couldn’t make this job up.  It will all go very smoothly” were Gillian Thompson’s encouraging words as she introduced the Debt Arrangement Scheme and other legislative changes.

There was no room in the 2004/05 legislative programme for the Bankruptcy and Diligence Bill.  Gordon Kilpatrick is going to be the Justice Department’s technical contact, and an “enforcement team” will be needed.  The AiB is not expecting it to be implemented until the first half of 2007.    “Please don’t shake your heads. It will work, it will!” she commented.

In response to questions about the fairness of having a three year sequestration period in Scotland whilst the period in England has been reduced to 12 months she reiterated that she was not planning to implement the changes until 2007, and that Ministers have stated there is no space in the 2004/05 legislative timetable.

Gillian Thompson was then able to announce that the AiB will be the Debt Arrangement Scheme (“DAS”) administrator for all time, not just temporarily.  The DAS thinking was put together with very little input from her predecessor. The planned date of going live is Autumn 2004 (November?) and Gillian Thompson thought her office could deliver what was required.  She would put more people onto that team, but if there were thousands of applications then it would be a “challenge” to respond quickly.

The DAS scheme is not going to be difficult to learn.  They are not expecting many cases to go to appeal.  They now anticipate more cases on paper rather than electronically as was originally envisaged.  “But it will all go swimmingly and be done on time”.

Gillian Thompson asked if any of the IPs present were planning to be money advisors and there was no positive response. In response to a question she stated that if a creditor agrees a deal then that is fine but otherwise there is no enforceability for compromises.  The response of the creditor bodies is not yet known. And there is no clear idea what impact, if any, this will have on the sequestration numbers. It was not intended that DAS would affect protected trust deeds.

The training for DAS has been oversubscribed with more than 200 approved money advisors expected.  So that maybe suggests that DAS is of interest to some.

Freedom of Information

Freedom of Information (“FOI”) comes into play on 1 January 2005.  The aim is to give a legal right of access to all information held by the public sector (but information covered by the Data Protection Legislation continued to be covered by that legislation rather than FOI).

When a letter (written request) asking for information is received there is only 20 days under FOI to respond. There is therefore already a code of practice, guidance on record keeping etc., and a 20 module work book on the Scottish Executive website.  Initial guidance is that the AiB is the holder of the information, whether or not there is an agent appointed. Information is to be free up where the cost to provide it is less than £100, and thereafter there is a maximum charge of 10% of the marginal cost up to a maximum.  So there would be a £50 charge if the cost to provide is £500. The AiB envisaged that these costs would fall on her office rather than having to be borne by the agent.

There is also a publication scheme to state the categories of information which are held.

Debtors will therefore be able to view the written comments upon them, and judgement will need to be exercised in what is written!  When a case is ongoing, there may be a case for restricting the right of access – particularly where this may have an impact on the realisation of assets. There is an Information Commissioner who will enforce access rights, if necessary.  All requests received by agents should be referred to the AiBs office.

Efficient Government

The executive plans to save £1bn, and all parts of the organisation are expected to contribute.  There will be a particular impact on the purchase of legal services. Rather than use local solicitors, agents will be expected to use the 12 legal firms approved after a tendering process.

Conclusion

Making the move to temporary accommodation is Ayrshire is part of the process started two years ago. The lack of a final site is unsatisfactory, but the progress is a “reality check” for the staff at George House.