CALLING OF STATUTORY MEETING (Hansard, 26 October 1992)

§ Mr. Stewart
I beg to move amendment No. 16, in page 8, line 18, leave out from 'below' to 'may' in line 20 and insert 'where the interim trustee is the Accountant in Bankruptcy, the statutory meeting'.

Mr. Deputy Speaker
With this it will be convenient to consider Government amendments Nos. 37 to 44, 46 and 49.

§ Mr. Stewart
The amendments are substantial, not purely technical and it is appropriate for me to explain their purpose as they constitute a response to comments made by hon. Members in Committee.
Amendments Nos. 16, 37, 38 and 46 are drafting amendments which clarify which procedures leading to the statutory meeting of creditors should apply when the accountant in bankruptcy is appointed interim trustee and which apply when someone other than the accountant is appointed interim trustee. The procedures are different and during our discussions in the Committee hon. Members said that there could be understandable confusion as to which rules applied when. The amendments aim to reduce any such confusion in the future and make the legislation easier to operate.
The Government did consider the suggestion made in Committee by the hon. Member for Glasgow, Garscadden (Mr. Dewar) that the discretion allowed in the Bill to the accountant in bankruptcy to dispense with a statutory meeting should be extended to other interim trustees. During the recess, we discussed that proposal further with the Scottish insolvency practitioners joint liaison committee, which is made up of representatives of the main professional organisations involved in sequestrations.
7.15 pm
There remains considerable concern that widening the discretion to other interim trustees would be a significant reduction in creditor rights, particularly the right to elect a permanent trustee of their choice to administer the sequestration. After all, in most of the sequestrations in which an insolvency practitioner is appointed interim trustee significant assets will be involved, and creditors' interest will be high. There is a strong feeling that dispensing with the statutory meeting can only be justified when the cost would otherwise fall on the taxpayer. We have therefore decided to retain the different procedures allowed in the Bill.
There was, however, a wide measure of support for another suggestion put forward by the Opposition in Committee. The suggestion was that all interim trustees should be allowed to apply for a certificate of summary administration when they are administering cases which fall within the criteria set out in clause 6. When such a 827 certificate is granted the permanent trustee has a greater discretion as to how the case is conducted and should be able to administer the sequestration at a lower cost.
Accordingly, the Government have brought forward amendments 39, 40 to 44 and 49 which allow both the accountant in bankruptcy and other interim trustees to apply to the court for a certificate of summary administration after the statutory meeting of creditors. The criteria as to which cases qualify remain the same, and the procedures to be followed are similar. Creditors and others retain the right to apply for the withdrawal of a certificate if they feel this is justified.
Overall, while the number of cases which are likely to fall into this category may be small, we believe that the amendments are a useful improvement to the Bill. I commend them as a good example of constructive Committee work. When positive suggestions were proposed by the Opposition, the Government subsequently consulted on them and are now able, with confidence, to commend the amendments to the House.