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In a recent judgment Lord Justice Maurice Kay observed, "In this case we are required to navigate waters of a kind for which the judicial ship would have been considered unsuitable until recent years." A lack of familiarity with upward trends in redress to the insolvency provisions is not something that the insolvency cruiser can be accused of as the Insolvency Service (IS) fourth quarter insolvency statistics for 2010 make clear. As always the statistics make very interesting reading. On the corporate side the figures show that "there were 3,955 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the fourth quarter of 2010... This was a decrease of 0.2% on the previous quarter and a decrease of 11.3% on the same period a year ago. This was made up of 1,200 compulsory liquidations (which are up 5.8% on the previous quarter but down 9.9% on the corresponding quarter of the previous year), and 2,755 creditors’ voluntary liquidations (which are down 2.6% on the previous quarter but down 11.8% on the corresponding quarter of the previous year). Additionally, there were 1,114 other corporate insolvencies in the fourth quarter of 2010... comprising 302 receiverships, 642 administrations and 170 company voluntary arrangements. In total these represented a decrease of 24.0% on the same period a year ago. Within this, administrations were down 24.4%."
On the personal side (pictured left and above) "there were 30,729 individual insolvencies in England and Wales in the fourth quarter of 2010. This was a decrease of 13.6% on the same period a year ago. This was made up of 12,049 bankruptcies (which were down 29.2% on the corresponding quarter of the previous year), 12,508 Individual Voluntary Arrangements (IVAs), (which were down 5.4% on the corresponding quarter of the previous year) and 6,172 Debt Relief Orders (DROs), (which were up 15.4% on the corresponding quarter of the previous year).."
As these figures bring together and finalise the statistics for 2010 the IS have taken the opportunity to compare 2010 with procedure use in previous years (pictured right). They note that, "there were 16,045 compulsory liquidations and creditors’ voluntary liquidations in total in 2010 – a decrease of 15.9% on 2009. In 2010 there were also 4,909 other corporate insolvencies, comprising 1,309 receiverships, 2,835 administrations and 765 company voluntary arrangements. In total these represented a decrease of 22.8% on 2009." In relation to personal insolvency the IS note that, "there were 135,089 individual insolvencies in England and Wales in 2010, an increase of 0.7% from 2009. This included 59,194 bankruptcies (which were down 20.7% on 2009), 50,716 Individual Voluntary Arrangements (IVAs), (which were up 6.5% on 2009) and 25,179 Debt Relief Orders (DROs)."
The figures have been picked up by the press. Some of the commentator and reader critique makes interesting reading. Whilst The Daily Telegraph ponders on the respective merits of IVAs as compared with bankruptcy (what about DROs?) the BBC for example have a quote which blames the weather for the reduction in the personal insolvency figures in the last quarter of 2010. Have they not heard of online filing? Their story notes, "Experts suggested this fall at the end of the year was the result of fewer people being able to attend court proceedings owing to the weather, a more sympathetic attitude from lenders, and people putting off insolvency until the new year." The story also notes that the 2010 personal insolvency figure (noted above) breaks all records for redress to the personal insolvency system. The Guardian meanwhile focuses on the use of bankruptcy when noting that "The number of people declared bankrupt in England and Wales during the final quarter of last year fell to its lowest level for almost six years." This story also carries some interesting reader comments, particularly in relation to the idea that bankruptcy has been overtaken by the alternative personal insolvency procedures (IVAs and DROs). The Independent notes the publication of the figures but offers no critique. Some of their readers do however, and again these are worth a brief read. The Sun has also picked up on the story illustrating the piece with a large picture of Mr Stephen Speed, the Director General of the IS. The story focuses on the number of people passing into the procedure per day. It is noted: "The number of people going bust hit a record last year as nearly 370 a day drowned under growing debt." The story also carries a quote from Mr Speed. He has observed, "It's starting to drop off a little bit, which may be the sign of something to come. There's a straw in the wind...A lot of people are aware they are in financial difficulty but rather than face up to it they look the other way. You have to be true to yourself." The Financial Times and ITN have also picked up on the story.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...