Statement of insolvency practice 9 (Scotland)

The particular nature of an insolvency office holder’s position renders transparency and fairness of primary importance in all their dealings. Creditors and other interested parties with a financial interest in the level of payments from an estate should be confident that the rules relating to the approval and disclosure of payments to insolvency office holders and their associates have been properly complied with.

The term associate is defined in the insolvency legislation. For the purposes of this statement of insolvency practice, office holders should, in addition to the definition in the insolvency legislation, consider the substance or likely perception of any association between the insolvency practitioner, their firm, or an individual within the insolvency practitioner’s firm and the recipient of a payment. 

Where a reasonable and informed third party might consider there would be an association, payments should be treated as if they are being made to an associate, notwithstanding the nature of the association may not meet the definitions in legislation.

This statement applies to all forms of insolvency proceedings under the Insolvency Act 1986 and the Bankruptcy (Scotland) Act 2016, except for the following:

a) Moratoriums under Part A1 of the Insolvency Act 1986
b) Members’ voluntary liquidation unless those paying the fees require such disclosures.