Trees

A lot of work in insolvency has historically involved sending pages and pages of documents through the post which to many will have very little meaning. The good news is, this now all encouraged to be sent by e-mail.

Use of electronic communication

The changes in the Insolvency Rules in 2010 allowed for Insolvency Practitioners to send out notices and information by e-mail. This was only allowable where creditors had specifically consented to the Insolvency Practitioner that they were happy to receive communication by e-mail.

The consent procedure was often disregarded by creditors and therefore resulted in the standard practice of all information continuing to be sent by post.

The changes to the rules means that where a creditor corresponded with the Company or debtor by e-mail in the normal course of business, almost all correspondence can be sent by e-mail by the Insolvency Practitioner unless they have specifically stated that correspondence must be sent by post.

This change will hopefully encourage insolvency practises to start building databases of creditor e-mail addresses, reduce postage and stationery costs and accordingly reduce the environmental impact by sending electronic communications rather than paper.

Use of websites

Again the use of websites to provide information to creditors and other stakeholders has been available since the 2010 rule changes. This is one of the more adopted changes by insolvency practices, however there are still some who insist on sending out 100 page CVA proposals in a fancy document binder which clearly costs an absolute fortune, financially and environmentally.

As with many creditors I can’t help but grimace when something like this lands on my desk and am much more welcoming of a concise letter or a link to a website where I can use the internet search features to find the information I’m looking for.

The new rules reduces the level of correspondence even further with officeholders now simply setting out a timeline as to when documents will be available to view on the website. It will then be down to stakeholders to access the website at the relevant time to obtain the documents.

The likely impact of this is that creditors will only receive correspondence at the start of a matter, the end of a matter and if a dividend is available.

The right to opt-out

One of the big communication changes is creditors can elect to opt out of receiving further correspondence in relation to a particular matter. The option will need to be given to creditors with the first notice with instructions on the opt out process, at which point they can be removed from any further mailing lists.

This does not preclude them from receiving a dividend and if a dividend becomes available and they have not claimed the office holder can still write to the creditor requesting a proof to be submitted.

Many creditors may take this up to keep their desks and inboxes clear as their main interest is often “am I going to get anything back”. The only correspondence they would then receive is if the answer to this is yes.