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IPs now have "EU-wide jurisdiction" in cross-border cases 24 February 2012

Insolvency practitioners (IPs) will now have “EU-wide jurisdiction” for serving insolvency applications in some cross-border cases, the new practice direction has confirmed.

The Chancellor of the High Court’s new Insolvency Practice Direction – which was today approved by the Lord Chancellor – has come into immediate effect.

IPs no longer need the court’s permission to serve orders on people- as long as they are based in the EU – involved with cases in which the company’s Centre of Main Interest (COMI) is recognised as being in England and Wales.

Glen Davis QC, who was a member of the subcommittee of the Bankruptcy and Companies Court Users’ Committee, which helped draft the direction, explained: “Insolvencies are increasingly international, at all levels there’s the prospect some of those affected will not be within this jurisdiction.

“When the insolvency rules were amended in April 2010 this created some uncertainty.

“That position is now made much clearer under the practice direction.”

“Hopefully, in a small way, it will make the lives of IPs procedurally just a little bit more straightforward.”

The practice direction has also confirmed applications to extend administrations should now not be made less than one month before the scheduled end of the process.

It follows a number of directives issued directly from registrars in recent years urging IPs to ensure they make the application in good time.

Insolvency specialist at Thomas Eggar LLP Frank Bouette, said: “It’s now important from an IPs perspective to get their diary reminders in check.

“If not the costs will be disallowed and they will have to fork them out of their own pocket.

“Before directives were issued by judges, but now the time scale has been enshrined in the practice direction.

“The time scale seemed to be changed all the time – now it’s laid down and there can’t be any argument or confusion.”

Also the ‘objective and guiding principles’ of IP pay – which had been previously been explained in a separate practice statement – have now been incorporated into the practice direction.

The previous practice direction came into force in 1999.

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