INSOL International. Collection of Practical Issues Important to Small Practitioners - Ireland. November Small Practice Issues Technical Series

Transcription

1 INSOL International Collection of Practical Issues Important to Small Practitioners - Ireland November 2014 Small Practice Issues Technical Series

2 Collection of Practical Issues Important to Small Practitioners - Ireland Contents i Acknowledgement ii 1. How to find information about IPs in your country How are practitioners in your country organised? What are the associations to contact & what do these associations do? Where do you go to get the information either when you are looking for someone, or looking for a solution? Are there lists of (qualified / certified) IPs available? How can these lists be accessed? 1 2. Cross-border issues important to smaller practitioners Information about available insolvency laws that apply to cross-border cases How to enforce claims abroad / how to do it / whom to get advice from? What are the key criteria to consider when tracing and recovering assets in a foreign jurisdiction? What rights and / or powers does a foreign insolvency officer have to act directly in a third country? Are there state aid supported proceedings available in your country that foreign IPs can use? 2 3. Marketing of smaller practices What are the marketing strategies that are used by the practitioners? 2 4. Financing options for small businesses Are there viable financial options for smaller businesses from conventional financing sources? 3 5. How do practitioners get remunerated? What are the available models to determine fees? 3 6. Litigation & funding litigation Funding causes of actions - Who are the best funders? Are there alternatives to litigation, for example arbitration or mediation? Enforcing judgments - local and foreign 3 7. Licensing and regulation of IPs How are IPs regulated? Who can become an IP or which professionals regularly work as IPs? What kind of work is carried out by IPs in your country? Who appoints an IP? Is an IP who gets court appointments as an administrator allowed to do advisory work as well? 4 8. Compliance issues 4 INSOL International 6-7 Queen Street, London, EC4N 1SP Tel: +44 (0) Fax: +44 (0) Copyright No part of this document may be reproduced or transmitted in any form or by any means without the prior permission of INSOL International. The publishers and authors accept no responsibility for any loss occasioned to any person acting or refraining from acting as a result of any view expressed herein. i

3 Acknowledgement INSOL International is pleased to present a country study on Ireland under its Small Practice Technical Papers Series focusing on A Collection of Practical Issues Important to Small Practitioners. The paper was written by Mr. Jim Luby of McStay Luby, Chartered Accountants, and the legal input was provided by Marsha Coughlan, of A&L Goodbody Solicitors. INSOL International sincerely thanks Jim Luby and Marsha Coughlan for providing INSOL members with this very informative paper on Ireland. November 2014 ii

4 Collection of Practical Issues Important to Small Practitioners - Ireland By Jim Luby, McStay Luby, Chartered Accountants Legal input - Marsha Coughlan, A&L Goodbody Solicitors There are many issues that smaller practitioners have to deal with on a daily basis. Management, business planning and financial control, human resources planning and professional development, marketing and communication, information communication and technology, compliance issues and fees are just a few examples. This report will highlight some of these topics that will be specifically of interest to members in other jurisdictions. Local issues therefore have not been covered in this template. 1. How to find information about IPs in your country 1.1 How are practitioners in your country organised? There is no mandatory organization of insolvency practitioners ( IPs ) in Ireland. IPs are typically accountants, either partners in accounting firms or sole practitioners. It is the individual IP who is appointed to act. Unlike in some other jurisdictions, lawyers typically do not act as IPs, but provide legal advice to the IP. 1.2 What are the associations to contact & what do these associations do? Irish Society of Insolvency Practitioners c/o Mason Hayes & Curran, South Bank House Barrow Street, Dublin 4, Ireland infor@isip.ie Chartered Accountants Ireland 47 Pearse St, Dublin Most IPs are members of ISIP, which is a representative non-mandatory association. Many IPs are also members of Chartered Accountants Ireland or the other accounting bodies. 1.3 Where do you go to get the information either when you are looking for someone, or looking for a solution? The above associations can be approached for recommendations. Advice can also be sought from the legal or accounting firms. The choice of the IP to be selected will depend upon the case and industry profile, the experience of the IP, and the resources required. 1.4 Are there lists of (qualified / certified) IPs available? How can these lists be accessed? The website of ISIP ( contains lists of practicing IPs. There are no specific qualifications or licensing requirements in Ireland. The views expressed in this report are the views of the authors and not of INSOL International, London. 1

5 2. Cross-border issues important to smaller practitioners 2.1 Information about available insolvency laws that apply to cross-border cases The Irish courts are bound by the EU Insolvency Regulation (Council Regulation 1346/2000//EC) on Insolvency Proceedings. There are many Irish legal decisions on the implementation of the Regulation in Ireland, and legal advice should be sought in this regard. In addition the Irish courts will have regard to any decisions delivered by the European court of Justice. The UNCITRAL Model Law has not been adopted in Ireland. The Irish courts will assist foreign office holders by way of Orders in Aid. As a general comment, Ireland is a signatory to and has implemented the various EC Treaties and Regulations dealing with the Recognition and Enforcement of judgments. 2.2 How to enforce claims abroad / how to do it / whom to get advice from? The EU Insolvency Regulation provides for automatic recognition by courts of other member states of a judgment delivered in one member state opening proceedings in accordance with Art 3. Local legal advice should be sought in relation to the operation of the Regulation. 2.3 What are the key criteria to consider when tracing and recovering assets in a foreign jurisdiction? There are a number of searches which can be carried out. These include property searches at the Property Registration Authority; company and director searches at the Companies Registration Office and judgment searches in the high court. Local IP and/or legal advice will be of assistance. As a general comment, Ireland has implemented the various EC Regulations and Directives on data protection which financial institutions must comply with. Accordingly a court order will be required to obtain information regarding bank accounts. 2.4 What rights and / or powers does a foreign insolvency officer have to act directly in a third country? A liquidator appointed in main proceedings in another member state has power under Art 18 of the regulation to exercise in Ireland the powers granted in that other state, where no secondary proceedings have been opened in Ireland. The Irish court may also grant assistance upon application if required. 2.5 Are there State aid supported proceedings available in your country that foreign IPs can use? There are no State aid supported proceedings available to pursue insolvency related litigation. 3. Marketing of smaller practices 3.1 What are the marketing strategies that are used by the practitioners? In the main, IPs obtain their work through reputation and experience. IPs will also advertise their services; publish technical articles in journals and newspapers; and take part in insolvencyrelated seminars. 2

6 4. Financing options for small businesses 4.1 Are there viable financial options for smaller businesses from conventional financing sources? The lending regime in Ireland in recent years has been restrictive due to the wellpublicised financial difficulties of Irish banks. Insolvency workout arrangements are typically reliant upon the company s own cashflow, taking advantage of deferral of pre-insolvency claims. There is no debtor-in-possession funding regime. However, a company availing of the examinerhsip restructuring process can borrow and provide a certain priority for those borrowings during the process. The State Insolvency Fund is responsible for the payment of arrears of wages etc due to employees up to certain statutory limits. 5. How do practitioners get remunerated? 5.1. What are the available models to determine fees? The most common method for determining IPs fees is a time based method. For secured lender appointments, typically in property related cases, fixed fees may be agreed. For court appointments, fees are subject to the sanction of the court. For non court liquidations, fees are approved by creditors or a Committee of Inspection representing creditors. 6. Litigation & funding litigation 6.1 Funding causes of actions - Who are the best funders? Litigation funding for insolvency-related cases is at a very early stage in Ireland. It is not uncommon for such cases to be funded by representative creditors, lenders or the Revenue Commissioners who are responsible for collection of taxes. 6.2 Are there alternatives to litigation, for example arbitration or mediation? Mediation is commonly used in Ireland, and many cases are referred by the court for mediation as a preliminary step. Arbitration, where the contract so provides, is also common, particularly in property related cases. 6.3 Enforcing judgments - local and foreign For a judgment creditor to have any advantage in a liquidation or insolvency process, execution must be completed before the liquidation or the insolvency process has commenced. A creditor who has obtained a judgment prior to the commencement of an insolvency process has an additional remedy in that he may obtain and enforce a judgment mortgage secured on property assets under the terms of the Judgment Mortgage (Ireland) Acts and the Land and Conveyancing Law Reform Act As set out above, Ireland is a signatory to and has implemented the various EC Treaties and Regulations dealing with the Enforcement and Recognition of judgments. 3

7 7. Licensing and regulation of IPs 7.1 How are IPs regulated? There are no legal requirements to be appointed as an IP to a non-court related matter. Lenders may appoint property experts as IPs in property cases. For court-related appointments, the court will take into account the experience, qualifications and resources of the IP, and a recommendation from a lawyer that such a person is fit and proper. IPs are supervised by the courts, creditors or committees of creditors. Members of accountancy bodies are subject to the supervision of those bodies. The Office of the Director of Corporate Enforcement also supervises the work of IPs in insolvent liquidations and has wider regulatory and investigative powers which to date have not been often used. 7.2 Who can become an IP or which professionals regularly work as IPs? As noted above, there are no regulatory or licensing requirements for an IP. The Companies Acts have a number of prohibitions including companies connected parties, auditors and persons convicted of certain offences. 7.3 What kind of work is carried out by IPs in your country? The work of IPs covers a broad spectrum from formal appointments to informal work-outs, preappointment advice, corporate finance and other advisory work. 7.4 Who appoints an IP? Secured lenders The courts Shareholders / creditors meetings Petitioning creditors The National Asset Management Agency (NAMA) 7.5 Is an IP who gets court appointments as an administrator allowed to do advisory work as well? Typically for a court appointment the IP would need to confirm to the court that there is no conflict with any pre-existing or continuing work. It would be unusual for an advisor to also be appointed as a liquidator. 8. Compliance issues IPs are required to comply with legislation including the submission of taxation returns; Companies Registration Office returns; reports to the Office of the Director of Corporate Enforcement on the conduct of directors and reports to court on court appointments. 4

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