There is no definition of ‘failure’ of a company Voluntary arrangement (CVA) in the Insolvency Act 1986 (IA 1986). It does not explain when failure will take place, or what its effect will be.

However, IA 1986 does recognise that an arrangement may ‘come to an end prematurely’ (see IA 1986, ss 5(2A)(b), 6(3)). This is defined as occurring when the CVA ceases to have effect ‘it has not been fully implemented in respect of all persons bound by the arrangement’ (see IA 1986, s 7B).

The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 apply to CVAs and also make some provision as to what must be done after termination; not more than 28 days after termination of the voluntary arrangement, the supervisor must serve a notice that the CVA has been terminated (see IR 2016, SI 2016/1024, r 2.44(1)).

The notice must be accompanied by a report summarising receipts and payments and explaining why the arrangement has terminated. It must also include a statement of the amount paid