The Institute of Chartered Accountants of Scotland (ICAS) has published its insolvency technical update for February 2025 which includes: the introduction of the Insolvency Service's new case management system (INSSight) , The Payment and Electronic Money Institution Insolvency (Scotland) (Amendment) Rules 2025 and new processes for trustee accounts.

The Institute of Chartered Accountants of Scotland (ICAS) has published its insolvency technical update to summarise recent developments in insolvency, in several areas including: The Bankruptcy (Scotland) Amendment Regulations 2024, stage two of the Bankruptcy and Diligence (Scotland) Bill, and a legal update on Christopher Turnbull's petition for relief under section 122 of the Insolvency Act 1986 (IA 1986) against the directors of Against The Head Limited.

The Institute of Chartered Accountants of Scotland (ICAS) has published its insolvency technical update for December 2024 which includes new insolvency bonding requirements from 1 December 2024, changes to protected trust deed requirements commencing 20 January 2025 and The Moveable Transactions (Scotland) Act 2023 will come into force on 1 April 2025, accompanied by various implementing regulations.

Under Scots law, the service of a winding up petition is principally governed by the Insolvency Act 1986 (IA 1986), the Act of Sederunt (Rules of the Court of Session 1994) 1994, SI 1994/1443 (for Court of Session petitions), and the Act of Sederunt (Sheriff Court Company Insolvency Rules) 1986, SI 1986/2297 (for Sheriff Court petitions). The appropriate court for presentation of the petition is determined by IA 1986, s 120(3): if the company’s paid up share capital does not exceed £120,000, the petition may be presented to the local Sheriff Court in the district where the company’s registered office is situated; otherwise,

The mere act of a company going into administration does not render a post-termination restriction (also known as a restrictive covenant) unenforceable. Consideration will need to be given to: • the circumstances in which a post-termination restriction becomes unenforceable, and • the effect of administration on the contract of employment Effect of repudiatory breach A repudiatory breach of contract by the employer will usually result in the employer being unable to rely on any post-termination restrictions (Billposting Co Ltd v Atkinson, Cantor Fitzgerald v Bird). However, there will be no repudiatory breach or wrongful dismissal where the terms of the contract expressly permit the employer to give pay in lieu of notice rather than allowing the employee to work their notice, and the employer dismisses in accordance with those contractual terms (Stewart (Rex) Jeffries Parker Ginsberg v Parker). For more information, see: • Practice Note: Post-termination restrictions—the effect of repudiatory breach • Practice Note:

A company voluntary arrangement (CVA) is a process established by the Insolvency Act 1986 whereby a company makes a proposal to its creditors in order to come to an arrangement to settle its outstanding debts. Although there is no requirement to prove that the company proposing the CVA is insolvent, in practice, many companies in CVAs are insolvent or experiencing severe financial difficulties but are still trading with the aim of returning to profit in the future. All creditors that had been given notice of the CVA are bound by the terms of the CVA in respect of amounts owed by the company as at the date of the CVA. If creditors either start to trade or continue to trade with the company after the date of the CVA, then (depending on the terms of the CVA) these debts may not be

Withdrawal and dismissal of a winding-up petition are not the same under either the Act of Sederunt (Sheriff Court Company Insolvency Rules) 1986 (the Sheriff Court Rules) or the Act of Sederunt (Rules of the Court of Session 1994) 1994 (the Court of Session Rules), SI 1994/1443. Distinction between withdrawal and dismissal Under both the Sheriff Court Rules and Court of Session Rules, withdrawal and dismissal are treated as distinct procedural outcomes. Specifically, rule 21(1)(c) of the Sheriff Court Rules states that the court may substitute as petitioner any creditor or contributory where the original petitioner ’consents to withdraw the petition or to allow it to be dismissed or refused’, thereby recognising withdrawal and dismissal as separate possibilities. The Court of Session Rules contain an identical

The Scottish Charity Regulator (OSCR) has announced that it will be displaying the accounts for all Scottish charities on the Scottish Charity Register from next year. Charities must submit the information to OSCR within nine months of their accounting ‘year-end’.

The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 3.12(2) provides that ‘If the court makes an administration order, the costs of the applicant, and of any other person whose costs are allowed by the court, are payable as an expense of the administration’. Similar rules apply in Scotland under the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018, SI 2018/1082, rr 3.51 and 3.116. In Irish Reel Productions Ltd v Capitol Films Ltd Briggs J stated that in his judgment the phrase ‘the costs…of any person whose costs are allowed

It appears unlikely that a lease which gives the landlord the right to forfeit if the tenant is 'wound up' would be held to apply on entry into administration. That is because administration does not involve the winding up of a company, although it may lead to it–see Practice Note: Scotland: administrations—end of administration. Paragraph 3(1) of Sch B1 to the Insolvency Act 1986 (IA 1986) sets out the objectives of an administration: ‘(a) rescuing the company as a going concern, or (b) achieving a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration), or (c) realising property in order to make a distribution to one or more secured or preferential creditors’ See

Unlike in England, where there is an explicit requirement under the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 7.5(1)(I) for a winding-up petition to include a statement that a statutory demand has been served, along with the date of service and confirmation of insolvency, in Scotland, there is no equivalent requirement under the Insolvency (Scotland) (Receivership and Winding up) Rules 2018 (ISRWR 2018), SSI 2018/347. In Scotland, the form and content of a statutory demand, as well as the information to be included, is governed by ISRWR 2018, SSI 2018/347, rr 5.2 and 5.3.

Arbitration analysis: The Scottish Court of Session has refused to sist (pause) an action for arbitration where the defender submitted a substantive defence without clear qualification that a sist for arbitration was requested. The defender’s counsel was only made aware of the clause after defences were lodged. Despite amending the defences to include a request for arbitration before the preliminary hearing, the court found that the defender had already taken a step to answer a substantive claim. As a result, it was unable to then insist on the arbitration clause in terms of section 10(d) of the Arbitration Act (Scotland) Act 2010 (A(S)A 2010). The decision underlines the importance of defenders being clear from the outset if they intend to insist on an arbitration clause and provides a contrast to the court’s decision last year in Heart of Midlothian Football Club plc v Scottish Professional Football League Ltd. Written by Laura West, senior associate at CMS Cameron McKenna Nabarro Olswang LLP.