More soft law – ARITA’s insolvency practice statements

ARITA has released a number of draft Practice Statements for comment. 

These Practice Statements are designed to give ‘technical’ guidance on best practice approaches to particular task areas. Much of their content is extracted from the existing 2014 Code, and not included in the new draft 4th edition of the Code. 

The Practice Statements are said not to be ‘enforceable per se’ and they do not form part of the proposed 4th edition.

These follow a style found in the UK insolvency code and its various Statements of Insolvency Practice (SIPs), including Investigations (SIP 2), Funds handling (SIP 11), and the well know SIP 16 on pre-packs.

The proposed ARITA Practice Statements are:

Practice Statements – Advisory (PSAs)

PSA1 – Threats and Safeguards

Practice Statements – Insolvency (PSIs)

PSI1 – Independence

PSI2 – DIRRIs

PSI3 – Creditors’ Meetings

PSI4 – Voluntary Administrators’ Reports

PSI5 – Remuneration Reporting

PSI6 – Communication with Creditors

PSI7 – Disbursements

PSI8 – Remuneration

From hard to soft law

The hierarchy of law and guidance for corporate insolvency practitioners will then be extensive, ranging from the hard law itself, through the regulatory guidance down to the soft law codes.

  • Corporations Act
  • Insolvency Practice Schedule 2
  • Insolvency Practice Rules
  • Corporations Regulations
  • ASIC Regulatory Guides
  • APES 110
  • APES 330
  • ARITA Code
  • ARITA Practice Statements.

A similar list applies in bankruptcy law. Neither list includes court rules and guidance.

Helpful explanations of all the law and practice are found in Keay’s Insolvency and other such reputable texts, in on-going commentary from Murrays Legal, Australian Insolvency Law and other reputable sites, and from the decisions of the courts.

ARITA asks for comments by 8 February 2019.

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