This guidance is tailored specifically for official receivers. It is discretionary
and not designed for use by third parties. This version was the most up to date
guidance available to official receivers as at 10 March 2020.
1. The Official Receiver
Powers, duties and functions of the Official Receiver including situations where those
powers are limited by law or by internal operational rules.
Annexes
Annex A - Permission and sanction application
Annex B - Response to application to seek permission
Flowchart - How to apply for sanction or permission
Chapter content
Frequently asked questions - Changes to requirements for sanction and
permission
Introduction
Status and responsibility
Powers to act and seeking permission to act
Duties and functions of the Official Receiver
Role in investigation, disqualification and prosecution
Official Receiver as liquidator
Duty and functions as interim receiver and trustee
Frequently asked questions - Changes to
requirements for sanction and
permission
What do I need to know to understand these
changes?
The Act provides a list of the acts that an official receiver, as liquidator or trustee,
can carry out when dealing with an insolvent’s affairs. This list includes almost
everything that an official receiver could need to do.
So, what has changed?
The list was divided into two sections – one part being things that the liquidator or
trustee could do only with sanction (permission) of the Secretary of State and the
other part being of things they would not need sanction to do.
The law has changed to remove the requirement to obtain sanction for all acts in the
list. Many of the activities are common and routine functions and, in the interests of
deregulation, it was decided that the control put in place by the sanction process was
excessive.
So, an official receiver can now act freely,
without the need to seek sanction?
Unfortunately, it is not quite as simple as that. There are a very small number of
activities that an official receiver might want to carry out that are not in the list. They
are elsewhere in the Act. Some of those things continue to require sanction before
they can be carried out.
What are those things?
The things that still require sanction are:
• Dividing unsaleable property between creditors
• Paying expenses between partnership estates, and
• Calling on shareholders to pay for unpaid shares.
So, apart from those three minor areas, the
official receiver has full discretion to act
without seeking sanction.
Yes, that is right, and the removal of the requirement to seek sanction has afforded
the opportunity to relax other, internal, controls on the activities of the official
receiver.
In what ways have the internal controls on
the official receiver been relaxed?
There were many parts of the Technical Manual which told official receivers that they
needed permission of the Senior Official Receiver’s Office (the former Technical
Section) before carrying out certain acts. These have all been reviewed and the vast
majority of requirements to seek permission have been removed.
For which activities does the official receiver
still need the permission of the Senior Official
Receiver’s Office?
It has been decided that the requirement to seek permission will remain only in
respect of those activities where real harm might be done if they were to go
wrong. These activities are:
• Bringing or defending legal proceedings where no suitable costs protection is in place,
• Continuing the trading of an insolvent’s business, and
• Further spending of more than £2,500 when the estate account is in a debit position.
The official receiver is free to carry out all the
other activities that were formerly controlled?
An official receiver is free to exercise their discretion in this way, but they must be
able to show a demonstrable benefit to the estate in acting, and all relevant facts and
decision making processes must be recorded on the relevant ISCIS Note.
Why have these internal controls been
relaxed in this way?
The idea behind these changes is to follow the legislative relaxation of control
brought by the removal of the sanction process and to recognise and enhance the
discretionary powers of official receivers.
How do I apply for sanction or permission?
Although sanction is a legislative requirement and permission is an operational
requirement, they are so similar that it made sense to combine the processes into
one easy procedure.
In summary, the procedure is to make an application to the Senior Official Receiver’s
Office telling that Team why the anticipated action is considered to be the best thing
to do. This
flowchart tells you how to do this.
Introduction
1.1 History
The office of official receiver was created by the Bankruptcy Act 1883, which also
commissioned the then Board of Trade with the supervision of bankruptcy. The
objective was to impose greater official control over bankruptcy proceedings
generally, and over investigations in particular. The official receiver’s role was
extended to compulsory liquidations by the Companies Act 1890, and is today
largely set out in the Insolvency Act 1986. Originally, official receivers were a mixture
of salaried officers and fee paid local solicitors. Since the 1950s all official receivers
have been salaried, and are now appointed from The Insolvency Service (The
Service). The Insolvency Service is an executive agency within the Department of
Business, Energy and Industrial Strategy.
Status and responsibility
1.2 Status and functions
Official receivers are appointed, removed and act under the general direction of the
Secretary of State for BEIS. On appointment the official receiver becomes a statutory
office holder but is also a civil servant employed by The Service.1
The official receiver’s duties as a statutory office holder are largely set out in the
Insolvency Act 1986. They may have additional functions conferred on them by the
Secretary of State. On an operational level the official receiver complies with any
directions, instructions and guidance issued by The Insolvency Service.
The official receiver’s primary function is to administer and investigate the affairs of
companies and partnerships wound up by the court and of bankrupts. They will act
as liquidator of a company or trustee of a bankrupt’s estate if an insolvency
practitioner is not appointed and as liquidator/trustee ex officio if there is a vacancy
in that office. The official receiver remains under a duty to investigate when an
insolvency practitioner has been appointed as liquidator or trustee.
1. Sections 399 and 401(4)
1.3 Licensed Insolvency Practitioners
The Insolvency Act 1986 introduced the concept of licensed insolvency practitioners.
The official receiver does not have to be licensed to act as an insolvency
practitioner.1
1. Section 388(5)
1.4 Assistant and Deputy Official Receivers
An assistant/deputy official receiver assists or deputises for an official receiver, and
may act as liquidator or trustee. The Secretary of State appoints deputy official
receivers from The Insolvency Service.1 One official receiver may be appointed
deputy for another if it means a case will be more conveniently administered in that
way.
1. Section 401
1.5 Persons acting for the official receiver
The official receiver is not expected to carry out all of their duties personally, and at
times will authorise members of their staff to act in their place. Where the nominee is
not another official receiver or a deputy official receiver, the authorisation must be in
writing (which can include electronic form). The Secretary of State may similarly
authorise staff, for example where the official receiver is for some reason not
physically able to do so. The nominee needs the court’s prior permission to act in
any public or private examination or court application. Preferably, though not
necessarily, permission to act should be obtained in good time before any
proceedings.1
1. Rules 13.2 and15.21(1) and sections 133, 236, 290 or 366
1.6 Appointment
Official receivers may be appointed and removed from office by the Secretary of
State, who is responsible for their terms and conditions of employment.
An official receiver may not profit from their appointment, and all fees payable to
them for work done are paid to the Secretary of State.1
Each official receiver is attached to either the High Court (in London or a District
Registry) or to the County Court. Official receivers are all appointed by the Secretary
of State to the County Court and attend court regarding cases associated with the
County Court hearing centres located in the area covered by their office.
1. Section 399
1.7 Secretary of State’s general directions
The official receiver acts under the general guidance of the Secretary of State. The
Insolvency Service acts as the Secretary of State’s representative in this respect.
1.8 Advice to Official Receivers
Advice and guidance is generally available to the official receiver from:
• The Senior Official Receiver’s Team , on specific casework issues
• Policy Unit, on general policy and legislative matters
• Investigation and Enforcement Directorate, on criminal and civil disqualification
cases
The official receiver, as a statutory office holder, has discretion on how to carry out
their functions and how to manage the insolvency estate.
Powers to act and seeking permission to
act
1.9 Powers to act - general
The powers of the official receiver to act as liquidator or trustee arise from the
Insolvency Act 1986.
1.10 Acts in relation to which permission to
act is required
The requirement to seek permission of the Senior Official Receiver’s Office is limited
to those areas where real harm might be caused were the matter to go ‘wrong’.
The permission of the Senior Official Receiver’s Office is therefore required before
the official receiver can carry out the following acts:
• bringing or defending legal proceedings where there is a risk of adverse costs.
Where proceedings are conducted under a valid conditional fee agreement
which indemnifies the official receiver no permission would be required
• continuing the trading of the insolvent’s business
• to incur/increase a debit balance by over £2,500. Spending a credit balance is
at the discretion of the official receiver, whatever the amount
1.11 Acts in relation to which legislative
sanction is required
The following acts require the sanction of the Secretary of State before they can be
undertaken:
• the division amongst creditors of unsalable property
• making calls on contributories (see guidance on Sundry Assets and guidance
on Unregistered Companies)
• payment of expenses in relation to partnership cases
1.12 Incurring or increasing a debit balance
Where the estate is in a debit position, an official receiver must seek the permission
of the Senior Official Receiver’s Office before they make a payment in excess of
£2,500. The permission of Senior Official Receiver’s Office is not required however
to make a payment from the estate of £2,500 or less, even if the estate is in a debit
position. If the estate is in a credit position, an official receiver has full discretion to
utilise the credit funds, as necessary, provided that there is a demonstrable benefit to
the estate in doing so and all relevant decisions and facts are recorded on ISCIS in
the relevant Note.
1.13 The giving of sanction to official receivers
Where the official receiver is liquidator or trustee, the Act provides that the function
of giving of legislative sanction is vested in the Secretary of State. For the purpose of
giving sanction to the official receiver, the role of the Secretary of State is carried out
by the Senior Official Receiver’s Office.
1.14 Applications for permission or legislative
sanction
Applications for permission and legislative sanction from the Senior Official
Receiver’s Office are made following the same process, which is to complete the
form attached at
Annex 1 to this chapter. The form should be completed
electronically and e-mailed to the Senior Official Receiver’s Office inbox (ORS
Advice). All relevant questions in the form should be answered as fully as possible to
allow the application to be considered and dealt with as quickly as possible. Where
an act is required to be carried out urgently, and there is insufficient time to complete
the written application, staff in the Senior Official Receiver’s Office can give verbal
permission or legislative sanction in principle, but this must be followed up by a
written application, as above, at the earliest opportunity.
1.15 Response to application for permission or
legislative sanction
Assuming that Senior Official Receiver’s Office is satisfied that sanction should be
given, it will be given in writing, in the format attached to this guidance as
Annex 2,
and e-mailed to the person making the application.
1.16 Consequence of failure to seek legislative
sanction
The consequence of failing to obtain legislative sanction where it is needed is that
the official receiver will not be able to recover from the estate their costs in carrying
out the action Any act carried out by the official receiver, as liquidator or trustee,
without having obtained sanction (where required) is still valid.
1.17 Application for permission or legislative
sanction not to be made retrospectively
The application for permission or legislative sanction should be made prior to the act
for which permission or legislative sanction is required and, certainly, no later than
the time at which the action is carried out – and only then in circumstances where
staff in the Senior Official Receiver’s Office cannot be contacted by telephone to
agree permission or legislative sanction ‘in principle’.
Duties and functions of the Official
Receiver
1.18 Casework
The official receiver in performing their administrative duties needs to consider the
Official Receiver’s Casework Process Standard.
In accordance with ex parte James [1874] LR 9CH 609 the official receiver is under a
duty to be fair, principled, and honourable.
1.19 Accountability
The official receiver is accountable to the court as an officer of the court and as a
statutory office holder they are responsible to the creditors, contributories or the
bankrupt for the administration of the estate.
In practice these roles rarely conflict but if in a particular case the official receiver
had a duty or interest as liquidator or trustee which ran against the interest of BEIS,
their duty as liquidator or trustee would prevail.
1.20 Judicial Review
The judicial review procedure is a means by which the courts can supervise how
ministers and Government Departments or other public bodies exercise their powers
and carry out their duties. In carrying out their administrative functions the official
receiver exercises discretion whether to act, to act in a particular way or not to act at
all. It is this discretion that may be challenged by the party affected, by way of
application for judicial review.
Where the official receiver acts as an officer of the court they are not subject to
judicial review because they act under the supervision of the court to which they are
attached, and any complainant therefore has a remedy available to them through
application to the court.
1.21 Maintaining standards
The official receiver and their staff follow the principles set out in the Civil Service
Code and should conduct themselves with honesty and integrity. They should not
misuse their official position or information acquired in the course of their official
duties to further their private interests or those of others. They should not accept
benefits of any kind from any party which might reasonably be seen to compromise
their personal judgement or integrity.
1.22 The complaints procedure
The Insolvency Service is committed to providing a professional, efficient, courteous
and helpful service to its users - whether they are creditors, insolvency practitioners,
bankrupts, directors, or anyone with whom it has dealt. The Insolvency Service
operates a complaints procedure where a user is dissatisfied with the service
provided. Any complaint against the official receiver or their staff is dealt with under
this procedure.
Full details of the
complaints procedure
1.23 Supply of information
An official receiver should, where appropriate, tell the people with whom they deal
about their general rights and responsibilities, and let them know where they may
obtain further information or advice. The official receiver should not attempt to
provide legal or other advice or allow an inordinate amount of time to be spent in
assisting an individual when it is clear that advice is available elsewhere e.g. from
the local CAB.
The official receiver should ensure that any information given is accurate.
1.24 Inspection of Court file
The official receiver and their staff are entitled to inspect the court’s files on
insolvency proceedings. The court on request will forward any file, unless it is
currently in use at the court. The information required should be extracted, and
material photocopied if necessary, and the file returned to court as quickly as
practicable. No papers should be removed from the court file. Particular care should
be taken to ensure that the file is returned intact, with all of its contents in their
original order and condition.
1.25 Court Directions
The official receiver may apply to the court for directions when they are uncertain
how to proceed or wants the court’s approval for a particular course of action
1.26 Right of audience
Official receivers and deputy official receivers have a right of audience in the High
Court and the County Court in all insolvency proceedings. That includes all hearings,
whether in private or public, regardless of whether or not the official receiver is a
party to the application. The official receiver should inform the court of any relevant
information which may have a bearing on a particular application, or on a case in
general, although they will normally only attend court:-
• on their own applications
• where they have been made a party to, or given notice of, an application
• at the court’s request1
1. Rule 13.1(2)
1.27 Reports to Court
Instead of filing witness statements, the official receiver, as an officer of the court,
may submit evidence to the court in the form of a report. Considerable care should
be taken over the accuracy of a report, the contents of which are treated as prima
facie evidence, and the official receiver should clearly identify any opinions
expressed.1
1. Rule 12.28
1.28 Liability for costs and expenses
Various provisions in the Act and Insolvency Rules (e.g. on public examinations)
specify that the official receiver is not to be personally liable for costs. If the official
receiver is made a party to any proceedings on the application of another, they will
not be liable for costs unless the court so directs. Any expenses, including damages
incurred by the official receiver (acting in whatever capacity) in proceedings taken
against them, are treated as expenses of the insolvency, and are chargeable to the
estate.1
1. Rule 12.47
1.29 Duty on making of winding up order
On the making of a winding-up order, the official receiver’s has a duty to investigate
the causes of the failure and identify the reasons for it. The official receiver will also
carry out the functions of liquidator if so appointed. They should also consider the
conduct of the directors, partners or others who have taken part in the management
of the company/partnership, and report any suspected unfitness to the Secretary of
State.1
1. Section 132 and Company Director Disqualification Act 1986
1.30 Duty on making of bankruptcy order
On the making of a bankruptcy order, the official receiver’ has a duty to investigate
the conduct and affairs of the bankrupt, and report as they think fit to the court. The
official receiver will also carry out the functions of the trustee if so appointed. In
cases where bankruptcy orders are made against individual partners in conjunction
with an order against the partnership, the official receiver will be appointed trustee on
the making of the order.1
1. Section 289
1.31 Duty to report to creditors
The official receiver has a duty to send to the creditors and contributories of a
company and to the creditors of a bankrupt at least one report on the insolvency
proceedings and the state of the company’s or bankrupt’s affairs. A copy of the
report must be sent to the liquidator or trustee, if this is not the official receiver.
1.32 Liquidation committee
Where the official receiver is liquidator, a liquidation committee is not required or
able to act, and its functions vest in the Secretary of State. Where the Secretary of
State is required to carry out the functions of a liquidation committee delegated
authority to exercise the committee’s functions is held by the Senior Official
Receiver’s Office.1
1. Rules 7.48 and10.66
1.33 Creditors’ committee
A general meeting of creditors may not establish a creditors’ committee when the
official receiver is trustee of the bankrupt’s estate (except in connection with an
appointment of an insolvency practitioner at that meeting). When the official receiver
is trustee, a creditors’ committee is not required or able to act and its functions are
vested in the Secretary of State.1 Where the Secretary of State is required to carry
out the functions of a creditors’ committee delegated authority to exercise the
committee’s functions is held by the Senior Official Receiver’s Office.
1. Sections 141(4), 301(2) and 302(1) and rule 17.28
Role in investigation, disqualification
and prosecution
1.34 Duty to investigate (companies)
The official receiver has a duty to investigate the affairs and causes of failure of a
company, and the conduct of the directors or others concerned in the management
of the company. The duty to investigate is imposed in the public interest, but is not
owed to any particular person or category of persons, e.g. creditors. Section 132
does not prescribe the nature of the investigation to be carried out.
The official receiver has wide-ranging statutory powers to obtain information,
material, and explanations, including the power to examine people in court.1
1. Section 132
1.35 Duty to investigate (bankruptcies)
When a bankruptcy order is made, the official receiver has a duty to investigate the
conduct and financial affairs of the bankrupt for the period leading up to their
bankruptcy, in order to establish the causes of the bankrupt’s failure. This may
involve inquiries into the bankrupt’s affairs over a number of years, but the official
receiver will concentrate mainly on the period immediately before and after the
bankrupt became insolvent.
The duty to investigate is imposed in the public interest but is not owed to any
particular person or category of persons e.g. creditors. Section 289 does not
prescribe the nature of the investigation to be carried out.
The official receiver has wide ranging statutory powers to obtain information, material
and explanations including the power to examine people in court.1
1. Section 289
1.36 Powers of inquiry
The official receiver has wide powers of inquiry. Company officers, partners and
bankrupts are obliged to attend any requisite meetings and supply information, and
they may, if it proves necessary, be publicly examined in court.
The official receiver also has the power to apply to the court for the private
examination in court, of
• any officer of a liquidating company/partnership
• any person holding property of the company/partnership
• any debtor of the company/partnership
• any person who may be capable of giving information concerning the
company/partnership1
1. Sections 399 and 401(4)
At any time after the bankruptcy order has been made, the official receiver may
apply to the court for the private examination in court, of
• the bankrupt or the bankrupt’s spouse or former spouse or civil partner or
former civil partner
• any person known or believed to have any property of the bankrupt
• any debtor of the bankrupt
• any person capable of giving information concerning the bankrupt or the
bankrupt’s affairs1
1. Section 366
1.37 Use of powers of inquiry
The official receiver should rely initially on voluntary co-operation and goodwill during
their investigation, and only invoke the court’s powers of inquiry when necessary. If
the official receiver, as liquidator or trustee, applies for an examination their costs are
payable out of the estate unless the court orders otherwise. Where the official
receiver applies in some other capacity, no costs order may be made against them.1
1. Rule 12.22
1.38 Right of audience [Practice Direction:
Directors Disqualification Proceedings]
Official receivers and deputy official receivers have rights of audience in any
proceedings to which the Insolvent Companies (Disqualification of Unfit Directors)
Proceedings Rules 1987 apply, whether the application is made by the Secretary of
State or by the official receiver at their direction, and regardless of whether the
application is made in the High Court or the County Court.1
1. Rule 13.1(2)
1.39 Practice Direction: Directors
Disqualification Proceedings
Evidence in disqualification proceedings is by statement of truth, except where the
official receiver is the applicant, in which case their evidence may be in the form of a
report (with or without supporting statements of truth/witness statements by others).
A report is treated as prima facie evidence of its contents. The official receiver can
only file a report where they are the applicant. Where the Secretary of State is the
applicant, or in a case where the company has been dissolved or where the report is
being made in an Insolvency Practitioner’s case, the evidence must be by statement
of truth.
Official Receiver as liquidator
1.40 Acting as provisional liquidator
The official receiver may be appointed as provisional liquidator at any time following
the presentation of a winding-up petition. The basic function of the official receiver in
such circumstances is to protect property and take control of the company’s affairs
pending the hearing of the winding-up petition. The official receiver is entitled to be
paid for their services as provisional liquidator at an hourly rate.
1.41 Receivership
The court has power to appoint the official receiver as receiver on behalf of
debenture holders, but this power is rarely exercised. The official receiver should
contact the Senior Official Receiver Office if such an order is made.1
1. Section 32
1.42 Acting as liquidator
When a winding-up order is made the official receiver becomes liquidator unless and
until an insolvency practitioner is appointed in their place. The exception to this is
where the court has appointed a former administrator, or supervisor under a
voluntary arrangement, as liquidator at the time of the winding up. The official
receiver retains their duty to:
• investigate
• report to creditors
• report on the company officers’ conduct
The official receiver’s functions as liquidator include identifying, collecting, securing
and distributing the assets of the company.1
1. Section 140(3)
1.43 Functions as liquidator
As a liquidator of a company, the official receiver’s general functions are to secure
the assets, realise them and distribute the proceeds to the company’s creditors, and,
if there is a surplus, to the persons entitled to it (normally the contributories).
While they are liquidator, the official receiver is liable for their actions on the same
basis as an insolvency practitioner. For instance, if they wrongfully interfere with
property which does not belong to the company, by seizing or disposing of it, the
lawful owner may sue them to establish a right to return of the property or to the
proceeds of sale.1
1. Sections 143(1), 234(3) and (4)
1.44 Duty of Care
There is no strict duty on the official receiver to protect property which does not form
part of the estate. A duty of care may arise in respect of such property if the official
receiver could be considered a bailee of the property.
1.45 Liability as liquidator
When performing the duties of liquidator, the official receiver is an office holder, the
same as any insolvency practitioner, and consequently they are personally liable for
their actions. Consequently, section 212 will apply to the official receiver while acting
as liquidator, and an application may be made against them under that section.
Any creditor or contributory may apply to the court with regard to any of the powers
used by a liquidator. The court is reluctant to interfere in the liquidator’s exercise of
the powers conferred on them, and will only do so if a decision was taken in bad faith
or was so perverse that no liquidator properly advised could have taken it (Hamilton
v Official Receiver [1998] BPIR 602).
The effect of the release of a liquidator is to discharge all liabilities in respect of acts
or omissions in the administration of the estate. Any action subsequently brought
under section 212 requires the permission of the court.1
1. Sections 167(2), (5) and 174
1.46 Fees
The fees payable to the official receiver for acting as liquidator are governed by the
Insolvency Proceedings (Fees) Order 2016 and Regulation 35 of the Insolvency
Regulations 1994. The official receiver cannot use BEIS funds for administering
cases, e.g. obtaining legal advice, except by direction of the Secretary of State (in
practice, the Senior Official Receiver’s Office).
1.47 Death of an Official Receiver
If an official receiver dies in post, or otherwise ceases to hold office, or is succeeded,
any property vested in them, as office-holder, shall vest in their successor without
any conveyance, assignment or transfer.1
1. Section 400(3)
1.48 Vacancy in office (OR as liquidator (Ex
Officio))
When a practitioner vacates office as liquidator in a court winding up, the official
receiver becomes liquidator ex officio, i.e. by virtue of their office. Normally at that
stage the realisable assets will have been dealt with. Any assets becoming available
or coming to light after the dissolution of a company, are “bona vacantia” and
effectively pass to the Crown. If necessary, a company can be restored to the
register so that assets can be claimed for the benefit of creditors.1
1. Sections 136(3) and 137 and section 1029 Companies Act 2006
1.49 Partnerships Generally
The law on the winding up of insolvent partnerships is contained in the Insolvent
Partnerships Order 1994 (IPO) which adapts the provisions of the Insolvency Act
1986 to suit the special circumstances of partnership cases. Generally, a partnership
is wound up as an unregistered company as set out in Part V of the Act.
There is an important difference where a winding-up order is made against an
insolvent partnership, (as an unregistered company), and concurrent petitions are
presented against one or more of the insolvent partners. On the making of a
bankruptcy order against an individual partner, the official receiver is appointed
trustee in bankruptcy of the individual’s estate. The court may order the consolidation
of partners’ individual insolvency proceedings under section 303(2B), and/or make
an order or give directions under section 303(2C) on the administration of the
individual and partnership estates.1
There is another way of dealing with partnership property where individual partners
have been bankrupted and no petition has been presented against the partnership.
The Court may make a section 303(2A) order enabling the official receiver, as
trustee, to exercise the powers conferred by Schedule 4 to the IPO over the
partnership assets. The official receiver (or an insolvency practitioner appointed
instead of them, would effectively have access to the partnership assets without a
petition being presented against the partnership.
1. Section 303 Insolvent Partnerships Order 1994
Duty and functions as interim receiver
and trustee
1.50 Interim receiver
The official receiver may be appointed by the court as interim receiver at any time
after the presentation of a bankruptcy petition. In such cases their basic function is to
protect the debtor’s property pending the hearing of the petition.
1.51 Acting as Trustee
The official receiver becomes trustee of the bankrupt’s estate on the making of a
bankruptcy order (excepting cases in which the court appoints an insolvency
practitioner as trustee)
The official receiver will become trustee if there is a vacancy in the office of trustee.
The bankrupt’s estate vests in the official receiver immediately on them becoming
trustee, without any conveyance, assignment or transfer.1
1. Sections 293(3), 295(4), 300(2) and 306
1.52 Function as Trustee
The powers and duties of the official receiver as trustee are mainly set out in Chapter
IV of Part IX of, and Schedule 5 to, the Act. They should arrange for the sale of any
assets and distribution of the proceeds to the creditors. The official receiver as
trustee should take appropriate action to identify and recover the bankrupt’s assets.
While acting as trustee, the official receiver is liable for their actions on the same
basis as an insolvency practitioner.1
1. Section 287(4)
1.53 Duty of Care
The official receiver is under no strict duty to protect property which does not form
part of the estate e.g. third party goods. A duty of care may arise where the official
receiver could be considered a bailee of the property.
1.54 Liability of Official Receivers
As trustee, the official receiver is an office-holder, and an application may be made
against them under section 303 or 304. Section 303 permits application to be made
to the court by a bankrupt, their creditors or any other person who is dissatisfied by
any act, omission or decision of a trustee of the bankrupt’s estate. The courts are
reluctant to interfere where a trustee has exercised their powers in good faith. The
effect of a release as trustee is to discharge all liabilities in respect of acts or
omissions in the administration of the estate. Any action subsequently brought under
section 304 requires the permission of the court.1
1. Sections 303 and 304
1.55 Fees
The fees payable to the official receiver acting as trustee are governed by the
Insolvency Proceedings (Fees) Order 2016 and Regulation 35 of the Insolvency
Regulations 1994.
The official receiver cannot use BEIS funds for the benefit of an estate e.g. obtaining
legal advice, except where this has been authorised by the Secretary of State, (in
practice the Senior Official Receiver Team)
1.56 Release of Insolvency Practitioner as
Trustee
When it appears to an insolvency practitioner trustee that the administration of the
bankrupt’s estate is complete, they have a duty to summon a final meeting of
creditors. The trustee must give 28 days’ notice of their intention to vacate office to
the official receiver, together with notice of any creditors’ meeting. If there is no
resolution against the trustee’s release, it has effect from the date that notice of the
final meeting is filed at court. The official receiver then becomes trustee ex officio,
i.e. by virtue of their office.1
1. Rule 10.87
1.57 Duty as ex-officio Trustee
When the official receiver becomes trustee ex officio, they are from then on
responsible for dealing with any post-release enquiries. Although normally by that
stage any realisable assets would have already been dealt with, there may be assets
which subsequently come to light or acquire a realisable value.1
1. Section 300(1) and (2