Notes for Guidance - Protected Trust Deeds - Bankruptcy (Scotland) Act 2016

In the event of an unforeseen circumstance, the trustee can seek approval for an increase in their fixed fee.

To obtain approval, the trustee must first notify all known creditors of the reason why an increase is required to their fixed fee and the amount that they wish to increase their fee by.

The trustee must receive the approval of a majority in value of the notified creditors, to have permission to increase their fee. Creditors should respond to the request for approval within 21 days of the date the request is issued.

If the trustee does not get the required approval from creditors and a majority of creditors in value have not notified the trustee that they refuse to approve the increase in fee, the trustee may ask the Accountant to approve their fee increase. In considering this the Accountant shall consider the number of creditors based on adjudicated and accepted claims.

The trustee must be able to demonstrate to the Accountant that the fee increase is for work that could not be foreseen when the trustee originally completed the Form 3. The Accountant shall only approve an increase in the fixed fee where matters could not be reasonably foreseen by the trustee at the date of the trust deed being signed. Factors including instances of debtor’s defaulting on contribution payments or other instances of non-compliance or routine matters in relation to the administration of a PTD will not be regarded as issues that could not be reasonably foreseen. An increase in the fixed fee shall not be agreed in those circumstances.

The Accountant will decide if the fee increase can be granted and the amount of any increase.

If the trustee is unhappy with the Accountant’s final decision on their application to increase their fee, they may seek a direction from a sheriff, to instruct the Accountant to approve the requested fee increase. Section 189 of the Act refers.