2024 No. 229
Insolvency, England And Wales
Water Industry, England And Wales
The Water Industry (Special Administration) (England and Wales) Rules 2024
Made
26th February 2024
Laid before Parliament
27th February 2024
Coming into force
19th March 2024
The Lord Chancellor, in the exercise of the powers conferred by section 411 of the Insolvency Act 1986 as applied by regulation 49 of the Water Industry (Special Administration) Regulations 2024 for the purpose of giving effect to provision made by or under sections 23 to 26 of the Water Industry Act 1991, makes these Rules.
The only provision made by these Rules is provision applying rules made under section 411 of the Insolvency Act 1986, with modifications, for the purposes of provision made by or under sections 23 to 26 of the Water Industry Act 1991.
The Secretary of State concurs in the making of these Rules.
The Chancellor of the High Court, by the authority of the Lady Chief Justice under section 411(7) of the Insolvency Act 1986, concurs in the making of these Rules in so far as they affect court procedure.
These Rules may be cited as the Water Industry (Special Administration) (England and Wales) Rules 2024 and come into force 21 days after the day on which they are laid.
(1) These Rules extend to England and Wales.
(2) These Rules apply to water industry companies in respect of which a court has made, or may make, a special administration order having effect at any time after these Rules come into force (including where such an order took effect before then).
(1) In these Rules—
“the 1986 Act” means the Insolvency Act 1986;
“the 1991 Act” means the Water Industry Act 1991;
“the 2016 Rules” mean the Insolvency (England and Wales) Rules 2016;
“Schedule B1” means Schedule B1 to the 1986 Act;
“special administration order” means an order of the kind described in section 23(1) of the 1991 Act;
“special administrator” means a person appointed by the court to manage the affairs, business and property of a water industry company under—
section 23(1) of the 1991 Act; or
paragraph 91 or 103 of Schedule B1; and
“water industry company” means a company of a kind mentioned in section 23(1) of the 1991 Act.
(2) In these Rules, a reference to the 1986 Act, or to a provision of the 1986 Act, is to that Act or provision as it is applied by, and has effect subject to, any modifications made by the Water Industry (Special Administration) Regulations 2024.
(3) In these Rules, unless the context demands otherwise, references to a rule, Chapter, Part, sub-division or Schedule, are to a rule, Chapter, Part or sub-division of, or Schedule to, the 2016 Rules, as modified or applied by these Rules.
5 Application of certain rules of the 2016 Rules with modifications
(1) These Rules apply certain provisions of the 2016 Rules, with modifications in certain cases, as follows—
(a) rules listed in the Schedule to these Rules apply for the purposes of these Rules subject to the modifications set out in paragraph (2) and in Parts 2 to 9;
(b) in Part 3 of the 2016 Rules—
(i) Chapter 5 applies with the insertion of rule 3.27A (see rule 41 of these Rules);
(ii) Chapter 7 (so far as it applies for the purposes of these Rules) applies with the insertion of rule 3.42A (see rule 47 of these Rules);
(c) in Part 12 of the 2016 Rules, Chapter 3 applies with the insertion of rule 12.13A (see rule 64 of these Rules);
(d) Schedules 3, 4, 5, 6 and 10 apply for the purposes of these Rules.
(2) Subject to the following provisions of these Rules and except where the context demands otherwise, where a rule of the 2016 Rules applies by virtue of these Rules, that rule has effect as if—
(i) for “administration” in each place where it occurs, there were substituted “special administration”;
(ii) for “administrator” in each place where it occurs, there were substituted “special administrator”;
(iii) for “office-holder” in each place where it occurs, there were substituted “special administrator”;
(iv) for “an”, in each place where it precedes “administration”, “administrator” or “office-holder”, there were substituted “a”.
Rule 1.2 has effect as if—
(a) in paragraph (2)—
(i) the following definitions were omitted—
(aa) “Article 1.2 undertaking”;
(bb) “bankruptcy application”;
(cc) “bankruptcy file”;
(dd) “bankruptcy restrictions register”;
(ee) “centre of main interests”;
(ff) “COMI proceedings”;
(gg) “debt relief restrictions register”;
(hh) “establishment”;
(ii) “establishment proceedings”;
(jj) “individual insolvency register”;
(kk) “individual register”;
(ll) “IVA”;
(mm) “nominated person”;
(nn) “office-holder”;
(oo) “trustee”;
(ii) for the following definitions there were substituted as follows—
(aa) for the definitions of “debt” and “small debt” there were substituted ““debt” and “small debt” are defined in rule 14.1(3) for the purposes of special administration;”;
(bb) for the definition of “the Gazette” there were substituted ““the Gazette” means the London Gazette;”;
(cc) for the definition of “insolvent estate” there were substituted ““insolvent estate” means, in relation to a special administration, the company’s assets;”;
(dd) for the definition of “prescribed order of priority” there were substituted ““prescribed order of priority” means the order of priority of payment of expenses set out in Chapter 10 of Part 3 for special administration proceedings;”;
(ee) for the definition of “prove” and “proof” there were substituted—
“prove” and “proof” have the following meaning—
a creditor who claims for a debt in writing is referred to as proving that debt;
the document by which the creditor makes the claim is referred to as that creditor’s proof; and
for the purpose of voting, or objecting to a deemed consent in a special administration, the requirements for a proof are satisfied by the convener or chair having been notified by the creditor in writing of a debt;
;
(iii) at the appropriate places, the following definitions were inserted—
“the 1991 Act” means the Water Industry Act 1991;
;
“purposes of special administration” is to be construed in accordance with section 23(2) to (2B) of the 1991 Act;
;
“qualifying water supply licensee” is to be construed in accordance with section 23(6) of the 1991 Act;
;
“relevant authority” means—
in the case of a special administration order that relates to a company appointed under section 6(1) of the 1991 Act to be the relevant undertaker for an area that is wholly or mainly in Wales, the Welsh Ministers, and
in any other case, the Secretary of State;
;
“relevant undertaker” means a company holding an appointment under Chapter I of Part 2 of the 1991 Act;
;
“Schedule B1” means Schedule B1 to the Act;
;
“special administration order” means an order of the kind described in section 23(1) of the 1991 Act;
;
“special administrator” means a person appointed by the court to manage the affairs, business and property of a water industry company under—
section 23(1) of the 1991 Act; or
paragraph 91 or 103 of Schedule B1;
;
“water industry company” means a company of a kind mentioned in section 23(1) of the 1991 Act;
;
(b) in paragraph (3) in the opening words and in sub-paragraph (a), there were omitted “, debtor or bankrupt”.
7 Information required to identify persons and proceedings etc. (rule 1.6)
Rule 1.6 has effect as if, in paragraph (2), in the table—
(a) the first entry (bankrupt) were omitted;
(b) in the second entry (company where it is the subject of the proceedings), in the second column, paragraphs (e), (f) and (g) were omitted;
(c) the fourth entry (debtor) were omitted;
(d) in the final entry (proceedings), paragraph (t) were omitted.
12 Registrar of companies: covering notices (rule 1.20)
Rule 1.20 has effect as if—
(a) paragraph (1)(b) were omitted;
(b) in paragraph (1A), sub-paragraphs (a), (c), (e), (f), (g), (l), (m), (n)(iii) and (iv) and (o) were omitted;
(c) in paragraph (2), “or the directors (as the case may be)” were omitted.
Rule 1.21 has effect as if, in paragraph (1)(b)(ii), for “the Act” to “rule” there were substituted “the 1991 Act, the section of the Act, the paragraph of Schedule B1, the rule, the regulation of the Water Industry (Special Administration) Regulations 2024, or the rule of the Water Industry (Special Administration) (England and Wales) Rules 2024 (as applicable)”.
14 Standard contents of documents relating to the office of office-holders (rule 1.22)
Rule 1.22 has effect as if for paragraph (1)(b) there were substituted—
(b) where the document relates to an appointment, the person, body or court making the appointment;
.
15 Standard contents of documents relating to other events (rule 1.27)
Rule 1.27 has effect as if, in sub-paragraph (a), for “the Act” to “rule” there were substituted “the 1991 Act, the section of the Act, the paragraph of Schedule B1, the rule, the regulation of the Water Industry (Special Administration) Regulations 2024, or the rule of the Water Industry (Special Administration) (England and Wales) Rules 2024 (as applicable)”.
16 Standard contents of notices to be delivered to persons other than the registrar of companies (rule 1.28)
Rule 1.28 has effect as if, in paragraph (1), for “Part A1 to 11 of the Act or the EU Regulation” there were substituted “Parts 1 and 6 and Schedule B1”.
Rule 1.29 has effect as if—
(a) paragraph (c) were omitted;
(b) in paragraph (d), for “the Act” to “rule” there were substituted “the 1991 Act, the section of the Act, the paragraph of Schedule B1, the rule, the regulation of the Water Industry (Special Administration) Regulations 2024, or the rule of the Water Industry (Special Administration) (England and Wales) Rules 2024 (as applicable)”.
18 Standard contents of notices relating to the office of office-holders (rule 1.30)
Rule 1.30 has effect as if for paragraph (b) there were substituted—
(b) where the document relates to an appointment, the person, body or court making the appointment;
.
19 Standard contents and authentication of applications to the court under Parts A1 to 11 of the Act (rule 1.35)
Rule 1.35 has effect as if for that rule there were substituted—
Standard contents and authentication of applications to the court within special administration
1.35. (1) This rule applies to applications to the court except an application for a special administration order.
(2) The application must be in writing and state—
(a) that the application is made under the Act, as applied and modified by the Water Industry (Special Administration) Regulations 2024, or these Rules as applied and modified by the Water Industry (Special Administration) (England and Wales) Rules 2024 (as applicable);
(b) the provision of any enactment referred to in sub-paragraph (a) under which the application is made;
(c) the names of the parties;
(d) the name of the company in special administration to which the application relates;
(e) the court (and where applicable, the division or district registry of that court) in which the application is made;
(f) where the court has previously allocated a number to the special administration proceedings within which the application is made, that number;
(g) the nature of the remedy or order applied for or the directions sought from the court;
(h) the names and addresses of the persons (if any) on whom it is intended to serve the application or that no person is intended to be served;
(i) where the Act or these Rules require that notice of the application is to be delivered to specified persons, the names and addresses of all those persons (so far as known to the applicant); and
(j) the applicant’s address for service.
(3) The application must be authenticated by or on behalf of the applicant or the applicant’s solicitor.
.
Rule 1.36 has effect as if, in paragraph (1), for “under Parts 1 to 11 of the Act or the EU Regulation” there were substituted “within a special administration”.
21 Delivery to the creditors and opting out (rule 1.37)
Rule 1.37 has effect as if—
(a) in paragraph (2)(c), for “sections 246C(2) or 379C(2)” there were substituted “section 246C(2)”;
(b) in paragraph (4), there were omitted “or individual”.
Rule 1.45 has effect as if, in paragraph (4), for “person who is the subject of the insolvency proceedings” there were substituted “company in special administration”.
35 Administration application (paragraph 12 of Schedule B1)
Rule 3.3 has effect as if for that rule there were substituted—
Special administration application (paragraph 12 of Schedule B1)
3.3. (1) An application for an order for special administration (“the application”) under section 24 of the 1991 Act in relation to a company must—
(a) be headed “Special administration application”;
(b) identify, immediately below the heading, the company to which the application relates;
(c) contain a statement identifying—
(i) whether the application is being made by the relevant authority or the Water Services Regulation Authority (“the applicant”); and
(ii) whether the company to which the application relates is a relevant undertaker or a qualifying water supply licensee;
(d) include the applicant’s name and address for service; and
(e) contain details of any issued and called-up capital, the number of shares into which the capital is divided, the nominal value of each share and the amount of capital paid up or treated as paid up.
(2) If the applicant is the Water Services Regulation Authority, the application must state that it is made with the consent of the relevant authority.
(3) If the application relates to a qualifying water supply licensee whose licence gives it a supplementary authorisation, the application must contain a statement that the Secretary of State or the Water Services Regulation Authority (as the case may be) has consulted the Welsh Ministers.
(4) The application must—
(a) specify the name and address of the person, or of each person, proposed for appointment as special administrator;
(b) state that the applicant believes that, for the reasons set out in the witness statement supporting the application, one or more of the grounds for making a special administration order specified in section 24(2) of the 1991 Act is satisfied;
(c) contain a statement that the applicant requests the court—
(i) to make a special administration order in relation to the company;
(ii) to appoint the proposed person to be special administrator; and
(iii) to make such ancillary order as the applicant may request, and such other order as the court thinks appropriate.
(5) The application must be authenticated by the applicant or the applicant’s solicitor and dated.
.
36 Witness statement in support of administration application (rule 3.6)
Rule 3.6 has effect as if—
(a) for paragraphs (1) to (3) there were substituted—
(1) A special administration application must be supported by a witness statement.
(2) The witness statement must state the nature of the authority of the person making it and the means of that person’s knowledge of the matters to which the witness statement relates.
(3) The witness statement must, to the best of the applicant’s knowledge or belief—
(a) state whether the company that is the subject of the application is a relevant undertaker, or a qualifying water supply licensee;
(b) state which of the grounds set out in section 24(2) of the 1991 Act the applicant believes are satisfied in relation to the company and the reasons for that belief;
(c) contain a statement of the company’s financial position, setting out the assets and liabilities of the company, including contingent and prospective liabilities;
(d) contain details of any security known or believed to be held by creditors of the company, and whether in any case the security is such as to confer power on the holder to appoint an administrative receiver;
(e) contain details of any notice served in accordance with section 26(1)(c) of the 1991 Act by any person intending to enforce a security over the company’s property;
(f) contain details of any step taken to enforce such a security;
(g) contain details of any insolvency proceedings in relation to the company, including any petition that has been presented for the winding up of the company;
(h) contain, where it is intended to appoint a number of persons as special administrators, a statement of the matters relating to the exercise of their functions set out in paragraph 100(2) of Schedule B1;
(i) state any other matters which, in the applicant’s opinion, will assist the court in deciding whether to make an order for special administration.
;
(b) paragraphs (4) and (5) were omitted.
Rule 3.8 has effect as if—
(a) paragraph (2) were omitted;
(b) in paragraph (3)—
(i) in the opening words, the words in brackets after “following” were omitted;
(ii) for sub-paragraph (za) to the end, there were substituted—
(a) the company;
(b) any person who has appointed, or is or may be entitled to appoint, an administrative receiver in relation to the company;
(c) if an administrative receiver has been appointed, the administrative receiver;
(d) if a petition is pending for the winding up of the company, the petitioner;
(e) the person, or each person, proposed for appointment as special administrator;
(f) the Environment Agency or Natural Resources Wales (as applicable);
(g) the Consumer Council for Water;
(h) the Chief Inspector of Drinking Water;
(i) if the applicant is the relevant authority, the Water Services Regulation Authority;
(j) if the applicant is the Water Services Regulation Authority, the relevant authority;
(k) if the company is a qualifying water supply licensee whose licence gives it a supplementary authorisation, the Welsh Ministers;
(l) any creditor who has served notice in accordance with section 26(1)(c) of the 1991 Act of the creditor’s intention to enforce the creditor’s security over property of the company.
.
Rule 3.15 has effect as if, after paragraph (2), there were inserted—
(2A) The applicant must as soon as reasonably practicable deliver a copy of the order—
(i) where the relevant authority was the applicant, to the Water Services Regulation Authority; or
(ii) where the Water Services Regulation Authority was the applicant, to the relevant authority.
.