Enterprise Act 2002
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The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition policy with respect to mergers and also changed the law governing bankruptcy.
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[edit] Competition policy
The Act had six major competition policy objectives; Make all competition decisions through independent bodies, root out forms of anti-competitive behaviour, create a strong deterrent effect, to redress injured parties in distortions of competition and raise the profile of competition policy in the UK.
The act formally created the Office of Fair Trading with new and enlarged powers, especially in relation to investigation and became fully independent from the government. It is now possible for searches to be carried out under warrant from this act of business premises involved with potentially prohibitable mergers. The act also established the Commission Appeals Tribunal (CAT) for companies to appeal against decisions by the Competition Commission. The role of the Director General of Fair Trading (DGFT) was also abolished and his powers given to the OFT, this was seen as an attempt to depersonalize the competition investigation process. The Minister of Trade and Industry in the past played a large role in competition policy, having final say over whether a particular merger was in the public interest. Under the new Act his role was significantly diminished in order to de-politicize competition regulation which had been accused of being inconsistent in the past. He now only has powers to intervene if the proposed merger will affect the media to the detriment of the public, national security or if one of the firms is a government contractor.
On the deterrence side of the act, jail terms of a maximum of five years for directors was introduced in order to increase deterrence for forming cartels. The competition commission also had its scope widened to cover investigations of whole industries, not just specific firm, for example the supermarket industry.
[edit] Bankruptcy law reforms
Since the 1 April 2004 there have been considerable changes to the laws concerning bankruptcy in England. Previously, bankruptcy would typically last for a period of between 2 and 3 years, but now the majority of bankruptcies will be discharged after only 12 months.
The law was changed to give those with genuine cases of financial hardship the opportunity to be free of their indebtedness.
For those who have tried, unsuccessfully, to resolve their financial difficulties, the new laws allow them to petition for their own bankruptcy and start again.
Additional changes also mean that there are harsher restrictions for those who have previously been made bankrupt and those who have been through criminal bankruptcy.
If an individual had previously been an undischarged bankrupt during the 15 years before the current bankruptcy (unless the previous bankruptcy was annulled) they will be automatically discharged on 1 April 2009.
A bankrupt may ask the court for a discharge 5 years after the date of the bankruptcy order, but the court can refuse or delay the discharge, or grant it conditionally on terms requiring you to make some payments out of the individuals income.
A person can however become free from bankruptcy immediately if the court annuls (cancels) the bankruptcy order; this normally happens when the debts (including any fees and expenses of the bankruptcy proceedings) have been paid in full or if the bankruptcy order was made in error.
Alternatively, if a person has failed to carry out their responsibilities under the bankruptcy proceedings, the Official Receiver could apply to the court to delay the discharge from bankruptcy. If the court is in agreement, the bankruptcy order can only end when the suspension has been lifted and the time remaining on the bankruptcy period has run out.
[edit] How assets are treated
There is now a limit of 3 years, during which the Official Receiver must deal with the debtors main residence. There is no time limit for dealing with other assets or properties.
If the Official Receiver fails to realize the family during this time, the property will revest in the (ex-)bankrupt.
Where it is believed that the debtor has brought about the bankruptcy through their own irresponsible or imprudent conduct, there are now more severe consequences.
If this is the case, the Official Receiver can apply for a Bankruptcy Restriction Order, which may be applicable for between 2 and 15 years, in addition to the normal length of discharge.
Examples of such situations:
Failure to produce or retain records; Incurring debts as a result of gambling; Incurring debts that have arisen as a result of precarious or risky conjecture.
Additionally, the cost to an individual that wishes to petition for their own bankruptcy has risen from £460 to £475 as of April 1, 2006
