Insolvency Practitioner Regulation

Ed Davey Excerpts

Thursday 10th February 2011 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

Everyone who is affected by insolvency, whether they be employees, consumers who have lost deposits or suppliers who have not been paid should have every confidence that insolvency procedures operate fairly and that insolvency practitioners deliver the best possible outcome in what are often difficult and challenging circumstances. In response to the OFT market study into corporate insolvency practitioners, I am today launching a consultation in respect of policy proposals intended to improve confidence in the insolvency regime and lead to better outcomes for those affected by insolvency proceedings.

These proposals are in line with the policies of this Government to drive balanced and sustainable growth, improve regulation and build a stronger economy. A dynamic economy, where it is easy to start and grow a business, needs effective and efficient insolvency mechanisms which return as much as is fair and possible to creditors when businesses fail.

The consultation seeks views on proposals to reform the regulatory framework for insolvency practitioners (IP’s) and amend some of the technical legislative provisions applicable to companies in administration and liquidation.

A key proposal is the introduction of an independent complaints body to handle complaints about IP’s, including complaints about their fees. While creditors can, at the moment, refer complaints about fees to the courts, this is cumbersome and costly. The new proposals would cut the cost of making a complaint and, also, would encourage unsecured creditors to hold IP’s to account for the fees they charge. Although the OFT study focused solely on the corporate insolvency market, the benefit of these proposals would extend to personal insolvency cases.

Further information, along with a copy of the consultation document, can be found on The Insolvency Service’s website at www.insolvency.gov.uk.