STATUTES
| Published date | 01 March 1977 |
| Date | 01 March 1977 |
| Author | Ian Fletcher |
| DOI | http://doi.org/10.1111/j.1468-2230.1977.tb02418.x |
STATUTES
THE
INSOLVENCY
Am 1976
HAVING
first been launched in the House of Lords in November
1975, the Insolvency Bill survived
a
protracted voyage across the
waters of
a
stormy session to receive the Royal Assent in November
1976. Although containing a mere fourteen sections together with
three short schedules, the Act is to be welcomed in view of the fact
that it is the first piece of legislation to be specifically addressed to
the insolvency law since the enactment of the even
less
lengthy
Bankruptcy (Amendment) Act of 1926. Thus, for some time to come,
the principal statute relating to bankruptcy will continue to be the
Bankruptcy Act 1914, many of whose provisions were but
re-enactments of earlier provisions dating from the nineteenth
century. It is gratifying to learn however that a long-overdue review
of the whole insolvency law has at last been entrusted to
a
committee established by the Department
of
Trade.' Pending the
eventual report of that committee, the Act of 1976 has effected a
limited number of urgently-needed adjustments to the existing law,
several of them pertaining to matters to which attention was drawn
by the Report
of
the
"
Justice
"
committee
on
bankruptcy published
in 1975. The Act also contains provisions regarding the law of
company insolvency, including a novel provision to facilitate the
disqualification of unfit persons from being directors of companies
(s.
9).
Increase
of
monetary
limits
Section
1
of, and Schedule
1
to the Act together have the effect
of increasing many of the monetary limits relating to bankruptcy
and winding up in England and Wales, and also in Scotland. These
limits, some of which had not been adjusted since the last century,
had become quite unrealistic in consequence of the decline in the
value
of
money. It was accordingly proposed that these sums should
be restored to the value they had when first fixed,' and
in
many
cases a multiplier of 12 has been employed
so
as to achieve this.
However, several exceptions have been made
in
order to avoid
producing figures which it was thought might become too high,
and it is significant that this restraint has been applied to the figure
which is the most critical of all, namely the minimum debt to
support a bankruptcy petition or, in company winding up, for
service of a statutory demand. In each case, the minimum figure
has been raised by a factor of four only, from E50 to E200.3 It is
1
Hansord,
H.C.Deb.,
Vol.
918
(October
25,
1976),
written answer number 20.
2
Hansard,
H.L.Deb.,
Vol.
366,
col.
761
(December
4,
1975).
3
The
Insolvency Bill originally specified a flgure
of
f300
(ie.
a six-fold increase).
This figure was reduced
to
€200
following rigorous opposition
in
Committee: sce
H.C. Standing
Committee
C,
cols.
3-82
(April
27
and
29,
1976).
192
To continue reading
Request your trial