In May 2025, The Chancellor of the High Court, the Rt. Hon. Sir Julian Flaux introduced a consultation in relation to a replacement for the current Practice Statement in relation to Schemes of Arrangement under Part 26 and Part 26A of the Companies Act 2006 ("CA 2006") dated 26 June 2020 ("Draft Practice Statement").
The existing Practice statement was implemented when Part 26A CA 2006 (Arrangements and reconstructions: companies in financial difficulty) was introduced during the COVID-19 pandemic. The primary aim of the Draft Practice Statement is to revise the Practice Statement to take account of nearly five years’ experience of the use of restructuring plans, with a view to improving the efficiency and fairness of the process under Part 26A. In particular, the draft Practice Statement seeks to:
i. the identification and early resolution of issues concerning (i) the jurisdiction of the Court to sanction the scheme or restructuring plan, (ii) the composition of classes of creditors and/or members; and (iii) the convening of meetings.; and
ii. facilitating the early identification and active case management of contested issues to promote the resolution of such issues in an efficient and orderly manner and involving a proportionate allocation of the Court's time and resources.
What are they key changes being introduced under the Draft Practice Statement?
Applicant to provide the Court with a "listing note"
When issuing its claim form, the scheme or plan company should file a listing note setting out briefly:
- a time estimate for the convening hearing;
- a time estimate for the sanction hearing;
- an indicative timetable for the proceedings overall including time for the giving of judgment and any application(s) for permission to appeal;
- a description of any relevant matters likely to have an impact on the proposed timetable, including in particular (i) a description of matters relevant to the financial position of the scheme or plan company; and (ii) a description of any matters which it is anticipated may give rise to contested issues in the proceedings; and e. if there is any perceived urgency, what the factors are giving rise to the urgency and when such factors first came to light.
Applicant to notify parties affected by the scheme/plan
The applicant must take all steps reasonably open to it to notify in writing to any person affected by the scheme or plan of the following matters:
- that the scheme or plan is being promoted;
- the purpose which the scheme or plan is designed to achieve and its effect;
- the meetings of creditors and/or members which the applicant considers will be required and their composition;
- the date and place fixed for the convening hearing;
- that such persons are entitled to attend the convening and sanction hearings; and
- how such persons may make further enquiries and obtain information about the scheme or plan.
Applicant's evidence at the convening hearing
The applicant should identify in its evidence for the convening hearing:
- the steps taken to give notification of the convening hearing and what, if any, response the applicant has had to the notification;
- whether any update is required to the matters covered in the listing note, in particular as regards the timing of the application and the proceedings overall;
- whether it is envisaged that the Court may be asked at the sanction stage to exercise its power to sanction a plan where one or more classes of creditors or members has not voted in favour of the plan;
- how it is proposed that members and/or creditors are to be given notice of any meetings convened to consider the scheme or plan; and
- the scheme or plan company’s proposals for dissemination of information to creditors or members after the convening hearing.
Further case management
The Court will consider at the convening hearing what further directions may be necessary for the resolution of an issue which may not be suitable for determination at the convening hearing. The Court may give directions in relation to any of the following issues:
- defining and, where necessary, limiting the issues to be resolved either prior to or at the sanction hearing;
- the order in which, and the timetable according to which, the issues are to be resolved;
- the service of evidence; d. the service of expert evidence, including the use of a single joint expert, and, where there is more than one expert, for meetings of experts;
- making further information available to those affected by the scheme or plan, including by orders for disclosure of information, or use of a data room, website or similar, on such terms as to confidentiality as may be necessary; and
- costs provisions of those appearing before the Court to support or oppose the scheme or plan.
Current update
Whilst the Revised Practice Statement was anticipated to be published by 31 July 2025, this has not yet taken place. The Revised Practice Statement consultation was driven by the rise in urgent and contested restructuring plans which are placing pressure on the courts and require a more proportionate approach to court time and resources. By facilitating the early identification and case management of contested issues, the aim is to ensure issues are resolved efficiently and the Court's time and resources are allocated more proportionately.
