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Reform to bankruptcy removes court process 10 October 2012

The government has announced that it will simplify entry procedures into bankruptcy by removing the court process as part of several measures designed to cut red tape.

Among the new amendments to the Enterprise and Regulatory Reform Bill published yesterday (9 October), the Department for Business, Innovation and Skills (BIS) revealed that it would enable individuals wishing to apply for their own bankruptcy to do so directly to a new adjudicator.

The new process should free up court resources and be cheaper to administer than the current system.

It follows a government consultation last year that looked at proposals to remove both debtor and creditor petitions for bankruptcy, and most company winding-up petitions, from the courts.

BIS has said there was little support for reform to the creditor bankruptcy or company petition process.

The majority of the 70 respondents were strongly against the idea of removing the courts from elements of the creditor petition process and voiced their concerns about the role and qualifications of the adjudicator and the need for a judge to determine third party applications.

The other measures announced in the bill include removing automatic liability on business for civil damages in health and safety cases when they are not found negligent.

Business minister Jo Swinson said: “Clearing away barriers to help businesses grow and invest is an essential part of the government’s plan for growth.

“The Enterprise and Regulatory Reform Bill will help strengthen the business environment and boost confidence, by sweeping away needless bureaucracy and out-of-date rules.”

The amendments have been published ahead of the bill’s report stage and third reading in the House of Commons, due to take place on 16 and 17 October.

The government’s Red Tape Challenge was launched by prime minister David Cameron in April 2011 and aims to scrap or reduce some of the 6,500 regulations that the coalition inherited.



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