On 30 July 2020, the UK Insolvency Service published its quarterly insolvency statistics. Of note are the following:
Overall numbers of company insolvencies fell by 23% when compared with the previous quarter, and by 33% when compared with the same quarter in 2019. The three industries that experienced the highest number of insolvencies in this quarter were the: construction industry, the accommodation and food services industry, and the wholesale retail repair of vehicles industry.
The reduction in company insolvencies is not surprising given the support packages implemented by the government in response to the COVID-19 pandemic. The Insolvency Service has advised that “caution needs to be applied when interpreting these statistics” and suggested that the pandemic may have had some effect on the timeliness of insolvency registrations.
In particular, it highlighted that the lockdown may have resulted in insolvency practitioners, Companies House and courts not being able to process insolvencies “in the usual manner”. The Insolvency Service also commented that as it has no record of whether an insolvency is directly related to the pandemic or to other circumstances, it is not possible to state the direct effect of the pandemic on insolvency volumes.
Another practical takeaway is that the Insolvency Service plans to incorporate the new procedures of company moratorium or flexible restructuring plan introduced in the Corporate Insolvency and Governance Act 2020 into future statistical releases. This should provide a useful gauge for how widely-used these new procedures are likely to be going forward.
For further information on the above, or any insolvency assistance, please contact us on 0207 467 3980 and speak to one of our insolvency law solicitors now. Alternatively, email us with your query at firstname.lastname@example.org and we will be sure to call you back at a time convenient for you. All communications will, of course, be dealt with in the strictest of confidence.