17 August 2020
R&I update - August 2020 – 1 of 3 Insights
On 30 July 2020, the UK Insolvency Service published its quarterly insolvency statistics. Notably:
The reduction in company insolvencies isn't surprising given the range of government support implemented in response to the COVID-19 pandemic. Interestingly, the Insolvency Service advised that "caution needs to be applied when interpreting these statistics" and suggested that the pandemic may have had some effect on the timeliness of insolvency registration.
In particular, it highlighted that the lockdown may have resulted in insolvency practitioners, Companies House and courts not being able to process insolvencies "in the usual manner". The Insolvency Service also commented that as it does not record whether an insolvency is directly related to the pandemic, it's not possible to state the direct effect of the pandemic on insolvency volumes.
Another practical takeaway is that the Insolvency Service plans to incorporate the new procedures of company moratorium or flexible restructuring plan introduced in the Corporate Insolvency and Governance Act 2020 into future statistical releases. This should provide a useful gauge for how widely-used these new procedures are going forward.
by Nick Moser