Bankruptcy (Desastre) (Jersey) Order 2006

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A decision made (26.06.06) to approve the Bankruptcy (Désastre) (Jersey) Order 2006.

Ministerial Decision

Subject:	Approval of the Bankruptcy (Désastre) (Jersey) Order 2006
Decision Reference:	MD-E-2006-0111		Exempt clause(s):
Type of Report: (oral or written)	Written		Person Giving Report (if oral):	n/a
Telephone or e-mail Meeting?	n/a		Report File ref:
Written report – Title	Approval of the Bankruptcy (Désastre) (Jersey) Order 2006
Written report – Author (name and job title)	Paul de Gruchy, Director Finance Industry Development
Decision(s): To approve the Order, with a view to the provisions of the Order coming into force at the same time as the introduction of the Bankruptcy (Désastre) (Amendment No.5) (Jersey) Law.
Reason(s) for decision: The Order is ancillary to the Bankruptcy (Désastre) Law and will come into force at the same time as Amendment No.5 to that Law, which is anticipated to come into force on 1 August 2006. The Order sets and updates out a number of matters in relation to the Bankruptcy Law that were previously included in Rules of Court. These are matters which are more appropriately made by Minister than by Rules of Court as they cover matters of policy, and the Order merely restates and where applicable updates these matters.
Action required: Minister to sign, date and seal the Order and the Director, Finance Industry Development to notify the Assistant Greffier, Publications Editor, Departmental liaison officer and the law draftsman before forwarding the Order to the Greffe for archiving.
Signature: Senator Philip Ozouf (Minister)		Date of Decision:

Bankruptcy (Desastre) (Jersey) Order 2006

MINISTER FOR ECONOMIC DEVELOPMENT

Bankruptcy (Désastre) (Jersey) Order 2006 (the “Order”)

1 THE ISSUE

1.1 The Bankruptcy (Désastre) (Amendment No.5) (Jersey) Law 2006 is expected to come into force on 1 August 2006. The Bankruptcy Law has always been supplemented by Rules made by the Superior Number of the Royal Court. However, during the drafting of Amendment No.5 it was felt that those Rules contained matters of both procedure and policy, and that matters of policy should more properly be set out in an order made by the Minister. The Order, a copy of which is annexed to this paper, sets out these matters of policy.

2 BACKGROUND

2.1 The Bankruptcy (Désastre) Law is the Island’s principal law relating to insolvency. The désastre is a flexible mechanism for dealing with the assets and liabilities of insolvent debtors, both individuals and bodies corporate. Insolvency is, however, a complex and often costly procedure and it is necessary to supplement the law with additional detail relating to the désastre, particularly by establishing certain “thresholds” that will apply in relation to insolvency.

2.2 The Order proposes the following:

2.2.1 Increasing the amount that a creditor must be owed before he can instigate a désastre from £1,000 to £3,000;

2.2.2 Confirming that a bankrupt shall only be guilty of the offence of failing to keep proper records if his unsecured liabilities at the date of the désastre exceed £20,000;

2.2.3 Confirming that a debtor commits an offence if he obtains credit in excess of £250 during a désastre without informing the intending creditor of the désastre;

2.2.4 Increase the amount payable in a desastre to employees of the debtor prior to payment of the debtor’s general creditors from £2,500 in total to £4,500, being divided into a maximum of £3,500 in respect of unpaid salaries and £1,000 in respect of holiday pay and bonuses.

2.3 All of the changes are supported and have been the subject of full consultation with the Viscount’s department. The overall effect of the changes is to ensure that the désastre remains an effective and equitable way of dealing with the estate of a bankrupt.

2.4 Once made, the Order will come into effect on the same day that the Bankruptcy (Désastre) (Amendment No.5) (Jersey) Law takes effect.

3 RECOMMENDATION

3.1 It is recommended that the Minister approve the Order, and instruct the Director, Finance Industry Development, to notify the States Greffe, the Departmental liaison officer and the law draftsman before forwarding the Order to the Greffe for archiving.

PAUL DE GRUCHY

Director, Finance Industry Development

23 June 2006

ANNEX