The Building Society Insolvency (England and Wales) Rules 2010

Litigation expenses and property subject to a floating charge–requirement for approval or authorisation

173

Apply rule 4.218B of the 1986 Rules.

Litigation expenses and property subject to a floating charge–request for approval or authorisation

174

Apply rule 4.218C of the 1986 Rules.

Litigation expenses and property subject to a floating charge–grant of approval or authorisation

175

Apply rule 4.218D of the 1986 Rules.

Litigation expenses and property subject to a floating charge–application to court by the building society liquidator

176

Apply rule 4.218E of the 1986 Rules.

Saving for powers of the court

177

Apply rule 4.220 of the 1986 Rules.

PART 17 — MISCELLANEOUS RULES

CHAPTER 1 — RETURN OF CAPITAL

Application to court for order authorising return of capital

178

Apply rule 4.221 of the 1986 Rules.

Procedure for return of capital

179

Apply rule 4.222 of the 1986 Rules.

CHAPTER 2 — CONCLUSION OF BUILDING SOCIETY INSOLVENCY

FSA’s directions under section 116 of the Banking Act

180

Where the FSA gives a direction under section 116 of the Banking Act (application by an interested person for postponement of dissolution) the FSA shall send a copy of the direction to that applicant[^f00064].

Procedure following appeal under section 116 of the Banking Act

181

Following an appeal under section 116(2) of the Banking Act (against a decision of the FSA under that section) the court shall send two sealed copies of its order to the person in whose favour the appeal was determined, and that person shall send one of the copies to the FSA.

PART 18 — COURT PROCEDURE AND PRACTICE

CHAPTER 1 — APPLICATIONS (GENERAL)

Preliminary

182

This Part applies to any application made to the court under Part 2 of the Banking Act or these Rules except an application under section 95 of the Banking Act for a building society insolvency order.

Interpretation

183

Apply rule 7.2 of the 1986 Rules[^f00065]. In paragraph (1) ignore from the second “and” to the end of the paragraph.

Form and contents of application

184

Apply rule 7.3 of the 1986 Rules.

Application under section 176A(5) to disapply section 176A

185

• (1) Apply rule 7.3A[^f00066] of the 1986 Rules.

• (2) In paragraph (1), ignore “administrator or receiver.”

• (3) Ignore paragraph (2)(a).

Filing and service of application

186

Apply rule 7.4 of the 1986 Rules.

Notice of application under section 176A(5)

187

Apply rule 7.4A[^f00067] of the 1986 Rules. Leave out the words from “save that notice” to the end.

Other hearings without notice

188

Apply rule 7.5 of the 1986 Rules.

Hearing of application

189

Apply rule 7.6 of the 1986 Rules.

Use of evidence

190

Apply rule 7.7 of the 1986 Rules.

Filing and service of witness statements

191

Apply rule 7.8 of the 1986 Rules. Ignore paragraph (2).

Use of reports

192

• (1) Unless the application involves other parties, or the court orders otherwise, a report may be filed in court instead of a witness statement by—

• (a) the building society liquidator,

• (b) the provisional building society liquidator, or

• (c) the special manager.

• (2) In any case where a report is filed instead of a witness statement, the report shall be treated for the purposes of rule 191, and any hearing before the court, as if it were a witness statement.

Adjournment of hearings: directions

193

Apply rule 7.10 of the 1986 Rules. In paragraph (2)(c)(iii), for “Rule 7.9(1)(b)” substitute “Rule 192(1) of the 2010 Rules”.

CHAPTER 2 — SHORTHAND WRITERS

Nomination and appointment of shorthand writers

194

• (1) Apply rule 7.16[^f00068] of the 1986 Rules.

• (2) In paragraph (1) leave out “and, in a county court, the registrar”.

• (3) In paragraph (2) leave out “133” and “251N, 290 or 366”.

• (4) Ignore paragraph (3).

Remuneration

195

Apply rule 7.17 of the 1986 Rules[^f00069].

CHAPTER 3 — ENFORCEMENT PROCEDURES

Enforcement of court orders

196

• (1) Apply rule 7.19 of the 1986 Rules.

• (2) Ignore paragraph (2).

Orders enforcing compliance with the Rules

197

• (1) The court may, on the application of the building society liquidator or the provisional building society liquidator as the case may be, make such orders as it thinks necessary for the enforcement of obligations falling on any person in accordance with—

• (a) section 143(2) (liquidator to furnish information, books, papers etc.) of the Insolvency Act or

• (b) section 235 (duty to cooperate with liquidator) of that Act.

• (2) An order of the court under this rule may provide that all the costs of and incidental to the application for it shall be borne by the person against whom the order is made.

Warrants (general provisions)

198

• (1) A warrant issued by the court under any provision of the 1986 Act shall be addressed to such officer of the High Court as the warrant specifies, or to any constable.

• (2) The person described in section 236(5) of the Insolvency Act as the prescribed officer of the court is the tipstaff and his assistants of the court.

• (3) In this Chapter, references to property include books, papers and records.

Warrants under section 236

199

Apply rule 7.23[^f00070] of the 1986 Rules. In paragraph (1), leave out “251N or 366 (the equivalent in bankruptcy)”.

CHAPTER 4 — COURT RECORDS AND RETURNS

Title of proceedings

200

Every proceeding under Part 2 of the Banking Act shall, with any necessary additions, be titled “IN THE MATTER OF …………….. (naming the building society to which the proceedings relate) AND IN THE MATTER OF THE BANKING ACT 2009”.

Court records

201

Apply rule 7.27 of the 1986 Rules.

Inspection of records

202

Apply rule 7.28 of the 1986 Rules.

File of court proceedings and inspection

203

• (1) The Court shall open and maintain a file for each building society insolvency and (subject to the direction of the registrar) all documents relating to that building society insolvency shall be placed on that file.

• (2) Where a file has been opened under paragraph (1), the following have the right, at all reasonable times, to inspect that file—

• (a) the building society liquidator,

• (b) any person stating in writing that they are a creditor of the building society to which the building society insolvency relates,

• (c) a member of the building society,

• (d) any person who is, or at any time has been, a director or officer of the building society to which the building society insolvency relates,

• (e) any person who is a contributory of the building society to which the building society insolvency relates, and

• (f) the Bank of England, the FSA and the FSCS.

• (3) The right of inspection conferred on any person by paragraph (2) may be exercised on their behalf by a person properly authorised by them.

• (4) Any person may, with permission of the court, inspect the file.

• (5) The right of inspection conferred by this rule is not exercisable in respect of documents, or parts of documents, which the court has directed (either generally or specially) are not to be open to inspection without the court’s permission.

• (6) An application for a direction of the court under paragraph (5) may be made by the building society liquidator or by any party appearing to the court to have an interest in the building society insolvency.

• (7) If, for the purposes of powers conferred by the Insolvency Act, the Banking Act or these Rules, the Secretary of State wishes to inspect the file on a building society insolvency and requests the court to transmit the file, the court shall comply with the request or, if the file is for the time being in use for the court’s own purposes, as soon as the file is no longer in such use.

• (8) Rule 202 applies in respect of the court’s file on any building society insolvency as it applies in respect of court records of general insolvency proceedings.

CHAPTER 5 — COSTS AND DETAILED ASSESSMENT

Application of the CPR

204

Apply rule 7.33 of the 1986 Rules[^f00071].

Requirement to assess costs by the detailed procedure

205

• (1) Apply rule 7.34 of the 1986 Rules[^f00072].

• (2) In paragraph (1)—

• (a) for “company insolvency” and “liquidation” substitute “building society insolvency”,

• (b) ignore sub-paragraph (b), and

• (c) for the words from “court to which” to the end substitute “High Court”.

• (3) In paragraph (2), leave out “or creditors”.

• (4) In paragraph (5), for “trustee in bankruptcy or a liquidator” substitute “building society liquidator.”

• (5) Ignore paragraph (6).

Procedure where detailed assessment required

206

Apply rule 7.35 of the 1986 Rules. Ignore paragraph (6).

Costs of officers charged with executions of writs or other process

207

• (1) Apply rule 7.36 of the 1986 Rules[^f00073].

• (2) In paragraph (1)(a), leave out “or 346(2)”.

• (3) In paragraph (1)(b), leave out “or 346(3)”.

Costs paid otherwise than out of the insolvent estate

208

Apply rule 7.38 of the 1986 Rules.

Award of costs against responsible insolvency practitioner

209

• (1) Apply rule 7.39 of the 1986 Rules.

• (2) Leave out from the beginning to “expenses” and “the official receiver or”.

Application for costs

210

• (1) Apply rule 7.40 of the 1986 Rules.

• (2) In paragraph (1) for “insolvency” substitute “building society insolvency”.

• (3) In paragraph (2), leave out the words from “, and, in winding up” to the end.

• (4) In paragraph (3), leave out “and, where appropriate, the official receiver”.

• (5) Ignore paragraph (3A)[^f00074].

Costs and expenses of witnesses

211

• (1) Apply rule 7.41[^f00075] of the 1986 Rules.

• (2) In paragraph (1), leave out “the bankrupt or the debtor or”.

• (3) Ignore paragraph (2).

Final costs certificate

212

Apply rule 7.42 of the 1986 Rules.

CHAPTER 6 — PERSONS INCAPABLE OF MANAGING THEIR AFFAIRS

Introductory

213

Apply rule 7.43 of the 1986 Rules[^f00076]. In paragraph (1), for (a), substitute “ by reason of being a protected person within the meaning of Part 21 of the CPR or”.

Appointment of another person to act

214

Apply rule 7.44 of the 1986 Rules. Ignore paragraph (3)(c).

Witness statement in support of application

215

• (1) Apply rule 7.45 of the 1986 Rules.

• (2) In paragraph (1) leave out from the beginning to “receiver”.

• (3) Ignore paragraph (2).

Service of notices following appointment

216

Apply rule 7.46 of the 1986 Rules.

CHAPTER 7 — APPEALS IN BUILDING SOCIETY INSOLVENCY PROCEEDINGS

Appeals and review of court orders

217

• (1) The High Court may review, rescind or vary any order made by it in the exercise of its jurisdiction under Part 2 of the Banking Act.

• (2) An appeal from a decision of a registrar of the High Court lies, with the permission of the registrar or a judge of the High Court, to a single judge of the High Court, and a second appeal lies, with the permission of the Court of Appeal, to the Court of Appeal.

• (3) An appeal of a decision of first instance of a judge of the High Court lies, with the permission of the judge or the Court of Appeal, to the Court of Appeal.

Procedure on appeal

218

Part 52 of the CPR applies with regard to the procedure for appeals.

Appeal against a decision of the Secretary of State

219

Apply rule 7.50 of the 1986 Rules[^f00077]. Ignore paragraph (2).

CHAPTER 8 — GENERAL

Principal court rules and practice to apply

220

• (1) The CPR and the practice and procedure of the High Court (including any practice direction) apply to building society insolvency proceedings in the High Court, with any necessary modifications, except so far as inconsistent with these Rules.

• (2) All building society insolvency proceedings shall be allocated to the multi–track for which CPR Part 29 makes provision, accordingly those provisions of the CPR which provide for allocation questionnaires and track allocation do not apply.

Right of attendance

221

Apply rule 7.53 of the 1986 Rules. In paragraph (1) for “company insolvency proceedings” substitute “building society insolvency proceedings”.

Restriction on concurrent proceedings and remedies

222

Where in a building society insolvency, the court makes an order staying any action, execution or legal process against the property of the building society, service of the order may be effected by delivering a sealed copy to the address for service of the claimant or other person having the carriage of the proceedings to be stayed.

Security in court

223

Apply rule 7.58 of the 1986 Rules.

Payment into court

224

Apply rule 7.59 of the 1986 Rules[^f00078].

Further information and disclosure

225

• (1) Apply rule 7.60 of the 1986 Rules[^f00079].

• (2) After paragraph (2) insert—

(3) Before the passing of a full payment resolution the court shall only grant an order on an application under paragraph (1)(b) if satisfied that granting the order is unlikely to prejudice the achievement of Objective 1.

Office copies of documents

226

Apply rule 7.61 of the 1986 Rules.

PART 19 — PROXIES

Definition of “proxy”

227

• (1) Apply rule 8.1 of the 1986 Rules[^f00080].

• (2) In paragraph (2) leave out “company”.

• (3) In paragraph (4), for “chairman of the meeting” to “official receiver” substitute “chair of the meeting or the building society liquidator”.

Issue and use of forms

228

Apply rule 8.2 of the 1986 Rules.

Use of proxies at meetings

229

Apply rule 8.3 of the 1986 Rules. Ignore paragraph (2).

Retention of proxies

230

Apply rule 8.4 of the 1986 Rules.

Right of inspection

231

• (1) Apply rule 8.5 of the 1986 Rules.

• (2) In paragraph (1)(b), for “a company’s members or” substitute “the building society’s” and for “company or of its” substitute “building society’s”.

• (3) For paragraph (2) substitute—

(2) The reference in paragraph (1) to creditors is to those creditors who have proved their debts, but this does not include a person whose proof has been wholly rejected for purposes of voting, dividend or otherwise.

• (4) Ignore paragraph (3)(b).

Proxy–holder with financial interest

232

Apply rule 8.6 of the 1986 Rules.

PART 20 — EXAMINATION OF PERSONS CONCERNED IN BUILDING SOCIETY INSOLVENCY

Preliminary

233

• (1) The rules in this Part relate to applications to the court for an order under section 236 of the Insolvency Act (inquiry into company’s dealings when it is, or is alleged to be, insolvent).

• (2) The following definitions apply—

• (a) the person in respect of whom an order is applied for is “the respondent”,

• (b) “the applicable section” is section 236 of the Insolvency Act, and

• (c) the building society is “the insolvent”.

Form and contents of application

234

Apply rule 9.2 of the 1986 Rules[^f00081].

Order for examination, etc.

235

Apply rule 9.3 of the 1986 Rules.

Procedure for examination

236

Apply rule 9.4 of the 1986 Rules[^f00082]. In paragraph (4) leave out “or 366”[^f00083].

Record of examination

237

Apply rule 9.5 of the 1986 Rules.

Costs of proceedings

238

• (1) Apply rule 9.6 of the 1986 Rules[^f00084].

• (2) In paragraph (2)(a) leave out “or 367(1)” and in paragraph (2)(b) leave out “or 367(2)”.

• (3) Ignore paragraph (3)(b).

• (4) Ignore paragraph (5).

PART 21 — DECLARATION AND PAYMENT OF DIVIDEND

Preliminary

239

• (1) The rules in this Part relate to the declaration and payment of dividends in a building society insolvency.

• (2) In this Part—

• “creditors” means those creditors of the building society of whom the building society liquidator is aware, or who are identified in the building society’s statement of affairs, and

• “the insolvent” means the building society.

Notice of intended dividend

240

Apply rule 11.2 of the 1986 Rules[^f00085]. Ignore paragraph (1)(b).

Final admission/rejection of proofs

241

Apply rule 11.3 of the 1986 Rules[^f00086]. Ignore paragraph (4).

Postponement or cancellation of dividend

242

Apply rule 11.4 of the 1986 Rules.

Decision to declare dividend

243

Apply rule 11.5 of the 1986 Rules.

Notice of declaration

244

• (1) Apply rule 11.6 of the 1986 Rules[^f00087].

• (2) Ignore paragraph (1)(b)[^f00088].

• (3) In paragraph (2), after (b), add—

(ba) expenses incurred by the building society liquidator in the achievement of Objective 1 under section 99 of the Banking Act.

Notice of no, or no further, dividend

245

Apply rule 11.7 of the 1986 Rules.

Proof altered after payment of dividend

246

Apply rule 11.8 of the 1986 Rules.

Secured creditors

247

Apply rule 11.9 of the 1986 Rules.

Disqualification from dividend

248

Apply rule 11.10 of the 1986 Rules.

Assignment of right to dividend

249

Apply rule 11.11 of the 1986 Rules.

Preferential creditors

250

Apply rule 11.12 of the 1986 Rules[^f00089].

Debt payable at future time

251

Apply rule 11.13 of the 1986 Rules[^f00090]. For paragraph (3) substitute—

(3) In paragraph (2), “relevant date” means the date of the commencement of building society insolvency.

PART 22 — MISCELLANEOUS AND GENERAL

Power of Secretary of State or Treasury to regulate certain matters

252

• (1) As provided for in paragraph 27 of Schedule 8 to the Insolvency Act[^f00091], either the Secretary of State or the Treasury may, subject to the Act and to these Rules, make regulations with respect to any matter provided for in these Rules relating to the carrying out of the functions of a building society liquidator or provisional building society liquidator, including, without prejudice to the generality of the above, provision with respect to the following matters arising in building society insolvency—

• (a) the preparation and keeping by building society liquidators and provisional building society liquidators of books, accounts and other records, and their production to such persons as may be authorised or required to inspect them;

• (b) the auditing of building society liquidators’ accounts;

• (c) the manner in which building society liquidators are to act in relation to the building society’s books, papers and other records, and the manner of their disposal by the building society liquidator or others;

• (d) the supply by the building society liquidator to creditors and contributories and to the liquidation committee of copies of documents relating to the building society insolvency and the affairs of the building society (on payment, in such cases as may be specified in the regulations, of a fee);

• (e) the manner in which insolvent estates are to be distributed by the building society liquidator, including provision with respect to unclaimed funds and dividends;

• (f) the manner in which monies coming into the hands of the building society liquidator are to be handled and invested and the payment of interest on sums which, in pursuance of regulations made under this sub-paragraph, have been paid into the Insolvency Services Account[^f00092].

• (2) Regulations made under paragraph (1) may—

• (a) confer a discretion on the court;

• (b) make non-compliance with any of the regulations a criminal offence;

• (c) make different provision for different cases, including different provision for different areas; and

• (d) contain such incidental, supplemental and transitional provisions as may appear to the Secretary of State or the Treasury as necessary or expedient.

Costs, expenses, etc.

253

• (1) All fees, costs, charges and other expenses incurred in the course of building society insolvency, except for any money paid by the FSCS to eligible depositors in pursuance of Objective 1, and any expense incurred by the FSCS in this process, are to be regarded as expenses of the building society insolvency.

• (2) The costs associated with the prescribed part (within the meaning of section 176A of the Insolvency Act) shall be paid out of that prescribed part.

Provable debts

254

• (1) Subject to paragraphs (2) and (3) in a building society insolvency all claims by creditors are provable as debts against the building society, whether they are present or future, certain or contingent, ascertained or sounding only in damages.

• (2) Any obligation arising under a confiscation order made under Parts 2, 3 or 4 of the Proceeds of Crime Act 2002[^f00093] is not provable.

• (3) The following are not provable except at a time when all other claims of creditors in the insolvency proceedings (other than any of a kind mentioned in this paragraph) have been paid in full with interest under section 189(2) of the Insolvency Act—

• (a) any claim arising by virtue of section 382(1)(a) of the Financial Services and Markets Act 2000, not being a claim arising by virtue of section 382(1)(b) of that Act; or

• (b) any claim which by virtue of the Insolvency Act or any enactment is a claim the payment of which in the building society insolvency is to be postponed.

• (4) Nothing in this rule prejudices any enactment or rule of law under which a particular kind of debt is not provable, whether on grounds of public policy or otherwise.

Notices

255

• (1) Apply rule 12.4 of the 1986 Rules.

• (2) Ignore references to the official receiver.

Quorum at meeting of creditors or contributories

256

• (1) Apply rule 12.4A of the 1986 Rules[^f00094].

• (2) For paragraph (3) substitute—

(3) For the purposes of this rule, the reference to the creditor or contributories necessary to constitute a quorum is to those persons present or represented by proxy by any person (including the chair).

Evidence of proceedings at meetings

257

Apply rule 12.5 of the 1986 Rules.

Documents issuing from Secretary of State

258

Apply rule 12.6 of the 1986 Rules.

Insolvency practitioner’s security

259

• (1) —Apply rule 12.8 of the 1986 Rules.

• (2) For paragraph (2) substitute—

(2) It is the duty of the liquidation committee in a building society insolvency to review from time to time the adequacy of the building society liquidator’s security.

Time limits

260

Apply rule 12.9(1) of the 1986 Rules[^f00095] as regards time limits for anything required or authorised to be done by these Rules.

Service by post

261

Apply rule 12.10 of the 1986 Rules[^f00096].

General provisions as to service

262

CPR Part 6 (service of documents) applies as regards any matter relating to the service of documents and the giving of notice in building society insolvency proceedings except in cases where a rule makes provision as to the service of a document or the giving of a notice.

Service outside the jurisdiction

263

• (1) CPR Part 6 applies as regards any matter relating to the service of documents in Scotland and Northern Ireland except in cases where a rule makes provision as to the service of a document or the giving of a notice.

• (2) Where for the purposes of building society insolvency proceedings any process or order of the court, or other document, is required to be served on a person who is not in the United Kingdom—

• (a) with regard to the service of documents in relation to which a rule makes provision, the court may order service to be effected within such time, on such person, at such place and in such manner as it thinks fit, and may also require such proof of service as it thinks fit,

• (b) with regard to the service of documents otherwise, CPR Rules 6.40(3) to 6.46 apply.

• (3) An application under paragraph (2)(a) shall be supported by a witness statement stating—

• (a) the grounds on which the application is made, and

• (b) in what place or country the person to be served is, or probably may be found.

Confidentiality of documents

264

• (1) Apply rule 12.13 of the 1986 Rules[^f00097].

• (2) In paragraph (2) ignore the reference to a creditors’ committee.

Notices sent simultaneously to the same person

265

Apply rule 12.14 of the 1986 Rules.

Right to copy documents

266

Apply rule 12.15 of the 1986 Rules[^f00098].

Charge for copy documents

267

Apply rule 12.15A of the 1986 Rules[^f00099].

Non–receipt of notice of meeting

268

Apply rule 12.16 of the 1986 Rules.

Right to have list of creditors

269

• (1) Where a creditor has the right under these Rules to inspect documents on the court file, the creditor may require the building society liquidator to send them a list of the building society’s creditors and the amounts of their respective debts.

• (2) Paragraph (1) does not apply if a statement of the building society’s affairs has been filed in court or filed with the FSA.

• (3) The building society liquidator must respond to a request in paragraph (1) but may charge the appropriate fee for doing so.

False claim of status as creditor, etc

270

Apply rule 12.18 of the 1986 Rules.

Execution overtaken by judgement debtor’s insolvency

271

• (1) This rule applies where execution has been taken out against property of a judgment debtor, and notice is given to the enforcement officer or other officer charged with the execution under section 184(1) of the Insolvency Act (that a building society insolvency order has been made against the debtor, or that a provisional building society liquidator has been appointed).

• (2) The notice shall be in writing and be delivered by personal service at, or sent by recorded delivery to, the office of the enforcement officer or (as the case may be) of the officer charged with the execution.

The Gazette

272

Apply rule 12.20 of the 1986 Rules.

Punishment of offences

273

Apply rule 12.21 of the 1986 Rules.

Notice of order under section 176A(5)

274

Apply rule 12.22 of the 1986 Rules[^f00100]. For references to “the liquidator, administrator or receiver” substitute “building society liquidator”.

PART 23 — INTERPRETATION

Introductory

275

This Part of the Rules has effect for their interpretation and application; and any definition given in this Part (and in any provision of the 1986 Rules applied by this Part) applies except, and in so far as, the context requires otherwise.

“The court”; “the registrar”

276

• (1) Apply rule 13.2 of the 1986 Rules.

• (2) Ignore paragraphs (3) and (5).

“Give notice”, etc.

277

Apply rule 13.3[^f00101] of the 1986 Rules. In paragraph (3) leave out from “except” to the end of the paragraph.

Notice, etc. to solicitors

278

Apply rule 13.4 of the 1986 Rules.

Notice to joint building society liquidators

279

Where two or more persons are acting jointly as the building society liquidator, delivery of a document to one of them is to be treated as delivery to them all.

“Insolvent estate”

280

References to “the insolvent estate” are to the assets of the building society.

“Responsible insolvency practitioner”, etc.

281

In relation to a building society insolvency, “the responsible insolvency practitioner” means the person acting in the building society insolvency as the building society liquidator or provisional building society liquidator.

“The appropriate fee”

282

”The appropriate fee” means 15 pence per A4 or A5 page, and 30 pence per A3 page.

“Debt”, “liability”

283

• (1) Apply rule 13.12 of the 1986 Rules[^f00102].

• (2) Ignore paragraph (5).

Expressions used generally

284

• (1) Apply rule 13.13 of the 1986 Rules[^f00103].

• (2) In paragraph (1) for “Rules 1.7” to “6.23” substitute “rule 10 of the 2009 Rules”.

• (3) In paragraph (5), after “Secretary of State” insert “or the Treasury”.

• (4) In paragraph (7), for “Chapter 20 of Part 4 of these Rules, or Chapter 23 of Part 6” substitute “Part 16 of the 2010 Rules ”.

• (5) Ignore paragraphs (8) to (14).

• (6) In paragraph (15), after “section 176A(2)(a)” insert “as applied by section 103 of the Banking Act 2009”.

The Schedule

285

The Schedule, which applies relevant schedules to the 1986 Rules to these Rules with modifications, has effect.

SCHEDULE

1

The following Schedules to the 1986 Rules are applied to these Rules—

• (a) Schedule 1. Ignore all references to “rule 4.72” and for paragraph (1) substitute—

(1) This Schedule applies where a building society insolvency order (see section 90C of the Building Societies Act 1986) has been made in respect of a building society

• (b) Schedule 5; and

• (c) Schedule 6.

Signed

Kenneth Clarke, C. — Lord Chancellor — 20th October 2010

We concur

James Duddridge — Michael Fabricant — Two of the Lords Commissioners of Her Majesty’s Treasury — 21st October 2010

I concur

The Chancellor of the High Court — 7th September 2010

Explanatory note

(This note is not part of the Rules)

EXPLANATORY NOTE

These Rules set out the procedure for the building society insolvency process under Part 2 of the Banking Act 2009 (c. 1).

The main features of building society insolvency are as follows. In the event of a building society becoming insolvent, it enables those depositors who are eligible for compensation under the Financial Services Compensation Scheme (FSCS) to either –

• (d) receive compensation for their unpaid deposits as soon as possible after the building society goes into building society insolvency; or

• (e) have their accounts transferred to a different building society or bank.

This is the first objective of the insolvency process.

The procedure can only be initiated by the Bank of England or the Financial Services Authority by application to the court. The court then makes a building society insolvency order, appointing a building society liquidator. In the initial stages, the building society liquidator is accountable to a liquidation committee comprising the FSA, the Bank of England and the FSCS.

Once the building society liquidator considers that the first objective is achieved, the liquidation committee will pass a resolution to that effect and the building society insolvency will move to the second objective which is to wind up the affairs of the building society so as to achieve the best results for the creditors as a whole.

The Rules are based on, and follow the same order as, the Insolvency Rules 1986 (S.I. 1986/1925) (“the 1986 Rules”) and certain provisions of the 1986 Rules are applied to these Rules, subject to a number of general and specific modifications.

Part 1 contains general provisions.

Part 2 of the Rules sets out the application process for a building society insolvency order.

Part 3 sets out the procedure for appointing a provisional building society liquidator.

Parts 4 to 8 set out the procedure concerning the statement of affairs, creditors and contributories.

Part 9 sets out provisions concerning the building society liquidator.

Part 10 sets out provisions concerning the liquidation committee.

Parts 11- 17 set out provisions relating to the building society’s assets and other miscellaneous provisions.

Part 18 sets out court procedure and practice.

Part 19 sets out provisions on proxies.

Part 20 sets out provisions concerning the examination of persons concerned in building society insolvency.

Part 21 sets out provisions relating to the declaration and payment of dividend.

Parts 22 and 23 set out miscellaneous and general provisions relating to the procedure.

An Impact Assessment relating to the rules for building society insolvency and special administration has been prepared and may be obtained from the Financial Regulatory Strategy Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ. It is also available on HM Treasury’s website (www.hm-treasury.gov.uk).

Footnotes

[^f00001]: 1986 c.45. Section 411 was amended by the Banking Act 2009 (c.1), section 125. Subsection 3(A) was inserted by S.I. 2009/805.

[^f00002]: Section 411(7) was added by the Constitutional Reform Act 2005 (c.4), section 15 and Schedule 4, paragraphs 185 and 188.

[^f00003]: S.I. 2009/805, amended by S.I. 2010/1189.

[^f00004]: 2009 c. 1.

[^f00005]: 1986 c.53. Section 90C was inserted by the Building Societies (Insolvency and Special Administration) Order 2009, article 2.

[^f00006]: SI 1986/1925 as amended by S.I. 1987/1919, 1989/397, 1991/495, 1993/602, 1995/586, 1999/359, 1999/1022, 2001/763, 2002/1307, 2002/2712, 2004/584, 2004/1070, 2005/527, 2006/1272, 2007/1974, 2008/737, 2009/642 and 2009/2472.

[^f00007]: S.I. 2009/2472.

[^f00008]: S.I. 1998/3132.

[^f00009]: 2000 c.8.

[^f00010]: 1986 c.45.

[^f00011]: Section 90D was inserted by S.I. 2009/805.

[^f00012]: Paragraph (2) was amended by S.I. 2009/642.

[^f00013]: Rule 4.21A was inserted by S.I. 1987/1919 and amended by S.I. 2008/737.

[^f00014]: Paragraph (2) was amended by S.I. 2008/737.

[^f00015]: Rule 4.31 was amended by S.I. 1987/1919 and S.I. 2009/642.

[^f00016]: Paragraph (7) was amended by S.I. 2008/737.

[^f00017]: Rule 4.37 was amended by S.I. 2008/737.

[^f00018]: Paragraph (1) was amended by S.I. 1987/1919.

[^f00019]: Paragraph (6) was amended by S.I. 2009/642.

[^f00020]: Paragraphs (3) and (4) were amended by S.I. 2008/737.

[^f00021]: Rule 4.63 was amended by S.I. 1987/1919.

[^f00022]: Paragraphs (3) and (4) were amended by S.I. 1987/1919.

[^f00023]: Rule 4.67 was amended by S.I. 2002/1307.

[^f00024]: Paragraph (8) was added by S.I. 2003/1730.

[^f00025]: Rule 4.74 was substituted by S.I. 2004/584.

[^f00026]: Paragraph (1) was substituted by S.I. 2004/584.

[^f00027]: Paragraph (2) was amended by S.I. 2008/737.

[^f00028]: 2000 c 8.

[^f00029]: Rule 4.91 was amended by S.I. 2003/1730 and S.I. 2005/527.

[^f00030]: Paragraph (1) was amended by S.I. 2005/527.

[^f00031]: Rule 4.93 was amended by S.I. 1987/1919 and 2005/527.

[^f00032]: Rule 4.94 was amended by S.I. 2005/527.

[^f00033]: Paragraph (3) was inserted by S.I. 2002/1307.

[^f00034]: Paragraph (3) was amended by S.I. 2008/737.

[^f00035]: Paragraphs (3) to (5) were substituted by S.I. 1987/1919.

[^f00036]: Rule 4.105 was amended by S.I. 2003/1730.

[^f00037]: Paragraphs (6) and (7) were added by S.I.1987/1919.

[^f00038]: Paragraph 5 of rule 4.119 was amended by S.I. 2008/737.

[^f00039]: Section 176A was inserted by the Enterprise Act 2002 (c.40), section 252.

[^f00040]: Rule 4.125A was inserted by S.I. 2004/584.

[^f00041]: Paragraph (6) was substituted by S.I. 2004/584.

[^f00042]: Rule 4.127A was inserted by S.I. 2004/584.

[^f00043]: Rule 4.127B was inserted by S.I. 2004/584.

[^f00044]: Paragraph (1) was revoked by S.I. 2004/584.

[^f00045]: Paragraph (4) was amended by S.I. 1987/1919 and S.I. 2008/737.

[^f00046]: Rule 4.137 was substituted by S.I. 1987/1919.

[^f00047]: Rule 4.138 was amended by S.I. 1987/1919 and S.I. 2004/584.

[^f00048]: Paragraph (1) was amended by S.I. 2008/737.

[^f00049]: Paragraph (7) was substituted by S.I. 2001/3649.

[^f00050]: Paragraphs (3) and (3A) were substituted by S.I. 1987/1919 and amended by S.I. 2009/2472.

[^f00051]: Paragraph (4) was amended by S.I. 1987/1919.

[^f00052]: Rule 4.159 was amended by S.I. 1987/1919, S.I. 2004/584 and S.I. 2009/2472.

[^f00053]: Paragraph (1) was amended by S.I. 1987/1919.

[^f00054]: Paragraph (2) was amended by S.I. 1987/1919.

[^f00055]: Rule 4.169 was amended by S.I. 2008/737.

[^f00056]: Paragraphs (2) and (7) were amended by S.I. 2008/737.

[^f00057]: Rule 4.172A was inserted by S.I. 1987/1919.

[^f00058]: Paragraph (2) was added by S.I. 1987/1919.

[^f00059]: Paragraph (1) was amended by S.I. 2005/527.

[^f00060]: Paragraph (3) was amended by S.I. 2008/737.

[^f00061]: Paragraphs (5) and (6) were amended by S.I. 2008/737.

[^f00062]: Rule 4.218 was amended by S.I. 2008/737.

[^f00063]: Rules 4.218A to E were inserted by S.I. 2008/737.

[^f00064]: The Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805, amended by S.I. 2010/1189)) modifies the application of section 116.

[^f00065]: Rule 7.2 was amended by S.I. 2009/642.

[^f00066]: Rule 7.3A was inserted by S.I. 2003/1730.

[^f00067]: Rule 7.4A was inserted by S.I. 2003/1730.

[^f00068]: Rule 7.16 was amended by S.I. 2009/642.

[^f00069]: Paragraph (2) was substituted by S.I. 1993/602.

[^f00070]: Rule 7.23 was amended by S.I. 2009/642.

[^f00071]: All the rules applied by this Chapter were substituted by S.I. 1999/1022.

[^f00072]: Paragraph (1) was amended by S.I. 2008/737.

[^f00073]: Paragraph (1) was amended by S.I. 2005/527.

[^f00074]: Paragraph (3A) was inserted by S.I. 2009/642.

[^f00075]: Rule 7.41 was amended by S.I. 2009/642.

[^f00076]: Paragraph (1) was amended by S.I. 2007/1898.

[^f00077]: Rule 7.50 was amended by S.I. 2003/1730.

[^f00078]: Rule 7.59 was amended by S.I.1999/1022.

[^f00079]: Rule 7.60 was substituted by S.I. 1999/1022.

[^f00080]: All the rules applied by this Chapter were amended by S.I. 1987/1919.

[^f00081]: Paragraph (3)(b) was substituted by S.I. 1999/1022.

[^f00082]: Paragraph (3) was substituted by S.I. 1999/1022. Paragraph (4) was amended by S.I. 2009/642.

[^f00083]: Paragraph (4) was amended by S.I. 2009/642.

[^f00084]: Paragraph (3) was substituted by S.I. 2008/737 and amended by S.I. 2009/642.

[^f00085]: Rule 11.2 was amended by S.I. 2002/1307, S.I. 1987/1919 and S.I. 2009/642.

[^f00086]: Paragraphs (3) and (4) were added by S.I. 2002/1307.

[^f00087]: Paragraph (3)(b) was substituted by S.I. 2002/1307.

[^f00088]: Sub–paragraphs (a) and (b) of rule 11.6(1) were amended by S.I. 2002/1307.

[^f00089]: Paragraph (2) was amended by S.I. 1987/1919.

[^f00090]: Paragraph (2) and (3) were substituted for the original paragraph (2) by S.I. 2005/527.

[^f00091]: Schedule 8 was amended by section 125 of the Banking Act.

[^f00092]: The Insolvency Services Account is referred to at section 403 of the Insolvency Act.

[^f00093]: 2002 c. 29.

[^f00094]: Rule 12.4A was inserted by S.I. 1987/1919 and has been amended by S.I. 2009/2472.

[^f00095]: Rule 12.9 was substituted by S.I. 1999/1022.

[^f00096]: Rule 12.10 was amended by S.I. 1987/1919.

[^f00097]: Rule 12.13 was amended by S.I. 1987/1919.

[^f00098]: Rule 12.15 was inserted by S.I. 2005/527.

[^f00099]: Rule 12.15A was inserted by S.I. 1987/1919.

[^f00100]: Rule 12.22 was inserted by S.I. 2003/1730 and amended by S.I. 2009/642.

[^f00101]: Rule 13.3 was amended by S.I. 2009/642.

[^f00102]: The rule was substituted by S.I. 2006/1272.

[^f00103]: Rule 13.13 was amended by S.I. 1999/1022, S.I. 2003/1730 and S.I. 2009/642.