On 20 December 2024, the Information Sharing (Disclosure by the Registrar) Regulations 2024 (the Regulations) came into force, providing insolvency practitioners (IPs) with greater access to non-public information held by Companies House.
What do the Regulations say?
The Regulations authorise Companies House to share non-public information with IPs, and the Official Receiver. Pursuant to the Regulations, the Registrar must be satisfied that the information is required by IPs for:
- making, or determining whether to make, certain claims within the applicable insolvency proceedings (such as antecedent transactions and fraudulent or wrongful trading); and/or
- tracing, realising or recovering property in the applicable insolvency proceedings.
The Regulations do not specify what “information” means. Therefore, it is not clear what non-public information is disclosable by Companies House.
However, the lack of definition means that the Regulations are not limited in their scope and is likely to lead to a wide interpretation of the meaning of “information”.
What is the effect of the Regulations?
The Regulations have been introduced to assist IPs in fulfilling their duties under insolvency legislation, which include a duty to investigate the affairs of the insolvent company and realise assets for the benefit of the insolvent company’s creditors.
The Regulations are an additional tool available to IPs which enhance their investigative powers by allowing Companies House to disclose information to them in a wider range of circumstances than was previously allowed.
Prior to the implementation of the Regulations, IPs could not obtain certain information held by Companies House without first incurring the costs associated with obtaining a court order compelling Companies House to provide the information sought, often in circumstances where there are limited or no funds in the insolvency.
It is worth noting that IPs will still be required to comply with the Data Protection Act 2018 and GDPR in respect of any personal information provided to them by Companies House.
Final Thoughts
Access to a new source of information is likely to be welcomed by IPs, who can rely on the Regulations to assist them in carrying out their duties to investigate the affairs of the insolvent company without having to incur the costs of obtaining a court order, thereby protecting creditors’ interests.
However, it is not yet clear how Companies House will apply the Regulations, so the practical impact of the Regulations remains to be seen.
The introduction of the Regulations indicates a willingness to enhance the powers afforded to IPs in obtaining information to assist them with fulfilling their duties more effectively, but should the Regulations go further and should other public agencies, such as the DVLA, be authorised to provide IPs with non-public information to assist them in fulfilling their duties and carrying out their investigations effectively?
We have come across numerous instances where being able to obtain information from the DVLA would have saved significant time and money.
How we can help
Abbie Fotheringham is an Associate in our expert Restructuring & Insolvency team.
If you have any questions in relation to the subjects discussed above, please contact Abbie or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.