The Channel Islands Association of Restructuring and Insolvency Experts (ARIES) – a member of INSOL International, has recently produced an updated series of guidance notes for Jersey insolvency practitioners that derives from the UK Statements of Insolvency Practice (SIPs).
The Jersey Statements of Insolvency Practice (JSIPs) are issued for use by anyone winding up a Jersey entity, with a view to maintaining high professional standards in insolvency work.
They set out basic principles and essential procedures with which those winding up companies are required to comply, ensuring a common approach to particular aspects of this work.
The JSIPs apply to any person or entity who undertakes:
- the winding up of a solvent or insolvent company
- the winding up of a foundation
- the winding up of a limited partnership or limited liability partnership in Jersey.
They can be either the liquidator, a Director or otherwise.
The JSIPs are issued by the Jersey Legal and Regulatory Committee of ARIES. Prior to use, all JSIPs are exposed to consultation with the following Jersey interested bodies:
- Viscount’s Department
- Jersey Companies Registry
- HM Receiver General
- Law Officers’ Department
Why do we need a Statement of Insolvency Practice?
The purpose of the JSIPs is to promote and maintain high standards of Practitioners operating in the Bailiwick. They are designed to set out the basic principles and best practice procedures to particular aspects of restructuring and insolvency practice. They provide guidance where there is currently uncertainty around legislation.
JSIPs should be read in conjunction with the wider fundamental principles embodied in ‘the Ethical Code’ and should be applied in accordance with the spirit of the Code. A literal interpretation of the JSIPs may not be appropriate where it would be contrary to the Ethical Code.
A Practitioner is expected to act in accordance with the following five principles:
Be straightforward and honest in all professional and business relationships.
Not allow bias, conflict of interest or undue influence of others to override professional or business judgements. If requested by stakeholders of the appointing authority, Practitioners should provide details of any threats identified to compliance with the Ethical Code and the safeguards it applies.
Maintain a professional knowledge and skill at the level required to ensure that a client or employer receives competent professional services based on current developments in practice, legislation and techniques. A Practitioner should act diligently and in accordance with applicable technical and professional standards when providing professional services.
Respect the confidentiality of information acquired as a result of professional and business relationships. A Practitioner should not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the Practitioner or third parties.
Comply with relevant laws and regulations and avoid any action that discredits their profession. A Practitioner should ensure that they are adequately resourced. Practitioners should conduct themselves with courtesy and consideration towards all with whom they come into contact with while preforming their work. A Practitioner should ensure that their acts, dealing and decision-making processes are transparent, understandable and readily identifiable, where to do so does not conflict with any legal or professional obligation, and that all significant decisions, particularly those relating to the realisation of assets, agreements or the handing of claims, are documented on the working files of the liquidation.
Any Practitioner who becomes aware of another Practitioner who they consider is not complying with, or who has not complied with the relevant laws and regulations and whose actions discredit their profession, should report that Practitioner to that Practitioner’s recognised professional body and to the Viscount, if applicable.
JSIPs are not statements of law
JSIPs are intended to provide support for the Jersey law by providing best practice guidance for restructuring and insolvency work in Jersey. The guidelines are provided to augment the Jersey law and establish good practice in the Bailiwick.
The Royal Court may look to JSIPs for guidance in assessing the conduct of a Practitioner on any issue brought before it.
JSIP1 is derived from the English Statement of Insolvency Practice 1 ‘An introduction to Statements of Insolvency Practice’ which applies in England and Wales from 1 October 2015.
No liability attaches to ARIES or to anybody or person involved in the preparation or promulgation of JSIPs.
JSIPs set out best practice rather than law. The decision to comply with JSIPs rests solely on the Practitioner, as does any liability arising from failure to comply. Where a Practitioner is in any doubt about the application of any provision of a JSIP, the Practitioner should obtain guidance from their recognised professional body or Jersey Advocate.
A Glossary of Terms
|ARIES||The Association of Restructuring and Insolvency Experts|
|Companies Law||The Companies (Jersey) Law 1991, as amended|
|Ethical Code||The code of ethics to be followed by Practitioners as set out in JSIP1|
|JFSC||The Jersey Financial Services Commission|
|JSIP||A Jersey Statement of Insolvency Practice|
|Practitioner||A Person or entity (in the event of a general partner winding up a limited partnership or a limited liability partnership) who undertakes the winding up of a solvent or insolvent company, or the winding up of a foundation, limited partnership, or limited liability partnership in Jersey, whether as liquidator, director, or otherwise|
|Royal Court||The Royal Court of Jersey|
|Rules||The Bankruptcy (Désastre) Rules 2006|