Corporate Insolvency and Governance Act 2020

Baroness Bowles of Berkhamsted Excerpts

Wednesday 29th July 2020 Lords Chamber

[Lord Callanan]

I know the noble Lord feels strongly about these matters, and we discussed this during the passage of the legislation. We strengthened the monitor’s role to include a requirement in guidance that the monitor should ensure that the directors of a company have informed all employees that a moratorium has come into force. However, it is too early to see how this will work in practice.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, due to coronavirus and various related measures, there is the potential for a large backlog when the courts and tribunals fully reopen, financial assistance to companies stops, and the whole process of winding-up petitions is removed. What is the capacity of courts, tribunals and practitioners to handle that surge, and how will it be monitored, especially for how it influences choices about and during moratoriums?

[Lord Callanan]

The latest official statistics show that the number of corporate insolvencies decreased by half in June 2020 compared to the same month last year. However, the noble Baroness is right to say that we may well face a large increase in the months to come. We have been working with the courts and have provided the resources to make sure that they can satisfy that demand.