Elliot Green
- Position: Insolvency Partner OCA
- Phone: +44 (0) 1753 551111
- Fax: +44 (0) 1753 550544
- Email: Elliot.Green@ouryclark.com
This case highlights that the IVA Protocol which applies to the vast majority of consumer orientated IVAs, is a voluntary code of best practice without legal enforceability over creditors.
The IVA Protocol has been widely taken up and endorsed by many organisations, including the British Bankers Association, whose members are usually representative of the largest block of creditors in many consumer IVAs.
In this case the Court declined to exercise its discretion to grant declaratory relief in the terms sought; that MBNA had to give a good reason as to the basis of its rejection of the debtor’s proposed IVA. The Court submitted that creditors who are inclined to be bound by the IVA Protocol might need more guidance from the Protocol itself on what was a good reason for rejecting an IVA.
Given the Protocol is a voluntary code, it would surprising if the Court were to impose such a code on creditors and remove the statutory right of a creditor to reject without reason a Protocol compliant IVA.
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