³ÉÈËÓ°Òô

The Law Commission has recently consulted on ideas for areas of law that would benefit from reform. Having listened to our subscribers’ feedback on how well virtual statutory declarations for administration appointments have worked during the pandemic and how beneficial they have been to lawyers and clients alike, the LexisPSL Restructuring and Insolvency team has submitted a proposal to extend their use post-pandemic.

Why reform the law relating to statutory declarations? 

Statutory declarations are used in many areas of law, including insolvency. It is not possible to appoint an administrator using the out-of-court procedure or commence a members’ voluntary liquidation (MVL) without making a statutory declaration.

Statutory declarations are governed by the Statutory Declarations Act 1835 (SDA 1835) which no longer reflects the modern world. The SDA 1835 prescribes the form of words that a statutory declaration should use but does not prescribe the formal requirements other than to specify that one must be made ‘in the presence of an authorised person’. Legal practice in this area is largely customary and custom dictates that the person swearing the statutory declaration should do so in the physical presence of the authorised person (usually a solicitor) administering it.

There is an additional hurdle in insolvency proceedings as the Insolvency (England and Wales) Rules 2016 provide that the Civil Procedure Rules (CPR) and any related Practice Directions apply to insolvency proceedings. The CPR also provides that an affidavit must be signed by the person before whom it was sworn and under the Interpretation Act 1978 and the Commissioners for Oath Act 1889, an affidavit includes a statutory declaration. This arguably suggests that the solicitor administering the statutory declaration should have the statutory declaration physically signed in front of them.

The in-person requirement became a significant problem during the pandemic and resulting lockdowns. To address this, the Temporary Insolvency Practice Direction was introduced in April 2020, which effectively permits remote statutory declarations for the purposes of opening administration proceedings (but not MVLs). After various revised Practice Directions, the current version expires on 30 September 2021.

To assist lawyers in making and administering virtual statutory declarations, last year LexisPSL published a by video conference, which the Law Society adopted and republished.

Affidavits are now less common in insolvency proceedings, but they are still required for freezing injunctions and contempt of court orders. As statutory declarations and affidavits are closely related, if the Law Commission were to look at modernising the law in relation to statutory declarations, affidavits could be dealt with conveniently at the same time.

What are the benefits of virtual statutory declarations and affidavits?

We think allowing virtual statutory declarations would be a positive procedural evolution for lawyers and clients alike with benefits including:

• modernisation of an archaic piece of legislation which requires burdensome steps that are easily avoided using modern technology
  
  
• bringing the procedure in line with other modern legal practices, for example virtual executions and evidence in court proceedings being given remotely
  
  
• meeting public expectations for carrying out administrative processes online
  
  
• cost, time and efficiency savings for clients (avoiding the need to travel potentially long distances or internationally to an independent solicitor)
  
  
• assisting individuals for whom mobility and travel is restricted
  
  
• reducing our carbon footprint by avoiding travel and particularly international travel for the purpose of making a statutory declaration that could be made virtually
  
  

How can you support the proposal?

If you or your organisation would like to register your support for the proposal, you can send expressions of support to the Law Commission at programme@lawcommission.gov.uk.