PPI Supplemental Guidance Note in relation to IVAs

In March 2017 the Court of Appeal delivered its decision in the case of Green v Wright. The decision provided some welcome clarification regarding the entitlement to PPI refunds which are received by a former supervisor following the completion of an IVA.

Following the Court’s decision, the Recognised Professional Bodies together with R3 undertook a review of the current Guidance issued in April 2013 and concluded that its provisions are unaffected by the decision in Green v Wright.

A supplemental note to the existing PPI Guidance has been issued to provide clarification in respect of IVAs only.

The guidance covers:

• Implications of the decision in Green v Wright
• Is the PPI refund as asset of the arrangement?
• What is the effect on any continuing trust of the completion or termination of the arrangement?
• What are the former supervisor’s obligations in respect of closed cases?
• Unexpected PPI claims in “full and final settlement” cases
• Documenting strategies, decisions and the reasons for them
• The importance of communications with debtors
• Future IVAs

Trust Deeds

The position in Scotland and that in England & Wales may appear to differ for what potentially may be viewed as the same issue. However, trust deeds and IVAs are different statutory procedures which are subject to inherently different insolvency legislation.

The decision in Green v Wright and court decisions in recent cases in Scotland regarding PPI may seem to be opposing; however, the courts have been consistent. The key issue is whether or not the trust created to deal with the assets has terminated. This was examined in more detail in a previous article by David Menzies’. In the interim, we await the Supreme Court hearing of the appeal in Dooneen Ltd & Others v Mond. This is due to be heard later this year or early in 2018.