Debtor's Welcome to their Brother
Debtor's Welcome to their Brother
The Cork Committee’s main recommendations touched on both corporate and personal insolvency law.
On the personal side the Cork Committee proposed the introduction of a new personal insolvency procedure that allowed for a composition between debtors and creditors under the auspices of a statutory procedure that used a moratorium. The Individual Voluntary Arrangement (IVA) procedure has gone on to be well used in modern practice. Its form and nature were also adopted for a company equivalent. Used with less frequency, the Company Voluntary Arrangement (CVA) is nevertheless still an important restructuring tool.
On the corporate side the Cork Committee’s recommendations included the introduction of an entirely new procedure, namely, administration. This procedure was proposed as an alternative to receiverships where no floating charge existed. The insolvency practitioner, it was envisaged, would be able to use administration in the same way as Sir Kenneth Cork and his brethren had used receivership, namely, to attempt, mostly successfully, the rescue companies as a going concern. Rescue was the key term of art for the committee. Building and maintaining an insolvency system that fostered a rescue culture was the key ambition of the Cork Committee.
More generally the Cork Committee proposed the introduction of professionalisation for individuals who undertook insolvency work using the procedures contained in the Insolvency and Companies Acts. From the enactment of the Insolvency Act 1986 insolvency practitioners (IPs) had to be regulated by one of the eight Recognised Professional Bodies (RPB), insured with professional indemnity and bond insurance, and regularly inspected by their RPB. The Cork Report spelt the end of the age of the so called ‘Cowboy Liquidator.’
The Cork Committee was made up of the leading lights of insolvency of the 1960s and 1970s. These included, inter alia, accountants such as the chairman Sir Kenneth Cork, sometime Lord Mayor of London and a leading insolvency accountant; lawyers such as Peter Millett QC, a successful Chancery barrister and later a Lord of Appeal in Ordinary who sat in many important cases insolvency and related case as Lord Millett of St Marylebone in the City of Westminster; Muir Hunter QC, the leading personal insolvency barrister of his day. The secretary of the Cork Committee was Commander Trevor Traynor, a retired Naval Officer who brought the same order and efficiency to the workings of the committee as he had deployed in his previous career. There were no academics on the committee, although the Cork Committee did receive evidence from, inter alia, Professor Ian Fletcher QC (UCL) and Professor Sir Roy Goode QC (Oxford), then more junior in their academic careers as respectively Dr. Fletcher (then of Aberystwyth, University of Wales) and Professor Goode (then of Queen Mary, University of London). Their submissions, and many others, can now be seen in the Cork Archive.