BANKRUPTCY AND DILIGENCE BILL - PROGRAMME BOARD MEETING

Friday 3 November 2006 ,2.00pm , 2W.06 SAH

Present:

Apologies:

Welcome

1. The Chair thanked those present for attending and welcomed the external stakeholders to the Board. Everyone introduced themselves.

Purpose

2. The Chair explained that the purpose of the Board will be to plan work streams, responsibilities and timings for the efficient, effective and timely implementation of those parts of the Bankruptcy and Diligence Bill relating to bankruptcy, protected trust deeds and the Debt Arrangement Scheme with particular focus on bankruptcy implementation.

Minutes of last meeting

3. The minutes of the last meeting were agreed. The Board agreed that minutes would be posted on the Scottish Executive website but comments made during meetings would remain anonymous, with only action points attributed to individuals.

Phase 1 - Foundation

4. Accountant in Bankruptcy (AiB) are preparing themselves for the implementation. A team of 15 are working on target towards the delivery of phase 1 which would deliver modernisation of the case management system to enable futures changes to accommodate bankruptcy reform. The new system would be in place for April 2007.

Phase 2 - Bankruptcy, LILAs and DAS

5. Phase 2 of the implementation programme would be delivery of the bankruptcy part of the Bill, Low Income Low Assets and the Debt Arrangement Scheme.

6. Bankruptcy - The part of the Bill dealing with bankruptcy changes would be delivered by end of 2007. A member of the board asked whether bankruptcy cases were expected to rise before the Bill was implemented. AiB confirmed that numbers were holding at the 05/06 level and the forecast for 06/07 was around 5% on top. Whether the changes in the bill would increase case numbers was difficult to predict but there would be an increase. In particular it was anticipated that their may be 5,000 LILA cases in the first year (07/08) AiB did not currently envisage problems in absorbing these extra cases for which there would be limited administration required. There was some discussion surrounding the requirement to carry out extensive research into creditor behaviour after the Bill has been implemented. It was clarified that there are 9 regulations in relation to bankruptcy reform assuming some changes could be dealt with together.

7. Debt Arrangement Scheme (DAS) - AiB had originally planned to implement the changes in phase 3 (timed for May 08) but had now included it in phase 2 for possible implementation by September 2007. It was agreed that regulations could perhaps be done before the election. A member of the board commented that this would be welcomed as detailed amendments can be brought in after the main implementation. It was clarified that DAS will deal only with current debts only. There was some discussion around whether it would be possible to change the policy on this to include other debts but it was pointed out that this would be difficult as it could require a new consultation exercise. AiB would meet with the original IT developers to clarify what changes might be needed to the case management system they would consider when the changes could be rolled-out, how complicated the system changes were and what transitional arrangements will need to be put in place to deal with them. It was explained that a gap in work between 1 September 06 and 12 April 07 shown on the AiB implementation plan was a result of the volume of work required on business analysis but this would not delay the roll-out.

8. Low Incomes Low Assets (LILA) - A member of the Board enquired whether the implementation of LILA would be straightforward. It was explained that as the scheme would be a streamlined administration exercise and similar to work undertaken by AiB previously it should not present problems, however a percentage of cases would be looked at in detail.

Phase 3 - Protected Trust Deeds

9. Phase 3 would cover the implementation of the changes to protected trust deeds (PTDs). Resource and flexibility issues dictated this phase would be delivered by May 2008 and subordinate legislation would be required post election in September 2007. A member of the board asked where the planned PTD training would be directed. It was clarified that the training identified on the plan was intended to be internal initially; however AiB might in future be able to offer training externally as it had prior to relocation but that would depend on resources.

Action: GT to provide research information to Micheline on creditor behaviour.

Action: GT to arrange for the Gantt chart to be updated to include dates for commencement orders and implementation dates for regulation before the next meeting.

Any Other Business

10. There was discussion surrounding publicity and dissemination of information on the changes. It was considered that this could cost between £100,000 and £200,000. Money Advice Scotland offered to draft something for marketing and promotion. It would look at who needs to know and how information would be disseminated but would not include costs.

11. It was agreed that June 2007 would be a key date for changes to the Sheriff Court Rules; however, this does not reflect when the Rules will be in place. A member of the Board advised that it was important that the Rules should be in place some 3 months prior to the implementation of the relevant bits of the Act, to allow training for SCS.

Action: MAS to draft a plan for marketing and publicity for the next meeting

Action: GT to add SCRC date to Gantt chart

Date of the next meeting

12. The next meeting would be held on 15 December, 2pm in St Andrew's House. Jane MacDonald gave her apologies in advance.