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Can declarations of solvency be witnessed remotely?

In the current climate, with the increase in remote working even prior to Covid-19, this question is likely to arise frequently and is one we have already had to consider in the context of a members voluntary liquidation.

There are various times when the need for a statutory declaration arises. One such time is when a company is in the process of being voluntary wound up. A director will be required to make a declaration of solvency confirming that a full inquiry has been made into the company’s affairs and that the director is satisfied that the company is able to pay its debts within a specific period not exceeding 12 months of the company being wound up (section 89 Insolvency Act 1986).

The requirement for a statutory declaration also arises if you are a qualifying floating charge holder and want to appoint an administrator out of court. You will need to file a statutory declaration with the Court with the notice of appointment (rule 3.17 of the Insolvency (England and Wales) Rules 2016.

Traditionally statutory declarations are administered while physically present in the office of the solicitor or person authorised to administer oaths. What can you do if this is not possible or practical?

The Law Society’s previous view

The Statutory Declarations Act 1835 did not of course envisage the possibility of remote working. The Law Society has in the past been asked whether statutory declarations can be administered by Skype and answered that “In the absence of any prescribed requirements or case law, it remains the custom for the declarant to be physically present before the solicitor or commissioner of oaths at the time of taking the declaration”.

The Law Society removed the above guidance from their website on 25 March 2020, no doubt in light of Covid-19 and the necessity to modernise how we work.

So while we await further guidance, what can you do?

There is currently no definite answer to confirm if statutory declarations administered remotely will be valid. However, the following are noteworthy and point to it being more likely that they will be considered to be valid:

  • even based on previous guidance from the Law Society it was not compulsory for the declarant to be physically present before the person attesting the declaration, it was simply customary.
  • a solicitor administeringthe statutory declaration may wish to witness the declaration but this is not actually required under the legislation or the Solicitors Regulation Authority Code of Conduct.
  • Practice Direction 32 of the Civil Procedure Rules requires an affidavit (which pursuant to Schedule 1 of the Interpretation Act 1978 includes a declaration) to be signed and completed by the person before whom it was sworn. “Before” does not rule out the document being sworn via video call.
  • The Courts are taking a more flexible approach towards remote working. The Coronavirus Act 2020 has already made changes to the Court system to facilitate remote hearings. Witnesses for hearings are able to take oaths or affirm remotely to participate in proceedings.

 

Our view is that in the absence of guidance or legislation to the contrary, it should be possible for a statutory declaration to be completed remotely via Skype, Zoom, FaceTime, WhatsApp video or another suitable App. While there is no legal requirement beyond custom to be physically present at the declaration, our view is that best practice would be for the declarant to sign and make the declaration before the solicitor during the video call, forward their copy of the document to the solicitor who completes the attestation their end. The solicitor can then send on the signed declaration by soft copy with a hard copy to follow by post. The advantage of this is that the soft copy may be filed electronically (such as at court or Companies House).

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