Legislation

The legislation governing corporate insolvency in Scotland is:

Provisions of the Insolvency Act 1986 applicable in Scotland

Accountant in Bankruptcy's policy development branch recently produced an up to date version of the Insolvency Act 1986 containing the provisions applicable under Scottish law. Please be aware that this document is a reference source only and has no formal status.

Any enquiries regarding the above should be sent to AiB@aib.gsi.gov.uk

Amendments to the Insolvency Act 1986

Significant amendments to The Insolvency Act 1986 were then made by the Company Director Disqualification Act 1986, the Human Rights Act 1998, the Scotland Act 1998, the Insolvency Act 2000 and the Enterprise Act 2002.

The Scotland Act 1998

The Scotland Act 1998 provides [1] that all main aspects of insolvency law in relation to companies and corporations are reserved within the UK legislative framework. Only receivership and the actual procedure for winding up of a company are devolved matters.

The Human Rights Act 1998

The introduction of the Human Rights Act 1998 means that a public authority, including any person whose function is of a public nature, may not act in contravention of the European Convention of Human Rights. It is thought that liquidators and administrators [2], who are officers of court, will be regarded as public authorities. Also voluntary liquidators (who are not deemed officers of court) may be regarded as such.

The Enterprise Act 2002

The Enterprise Act 2002 reformed corporate insolvency by streamlining the company administration process, making it easier to access and more flexible, restricting the use of administrative receivership and abolishing the Crown's preferential rights.

[1] Schedule 5, Head C: Trade and Industry, paragraph C2 Insolvency, effected by section 29 of the Act

[2] Appointed after the 2002 Act came into force