Uncertainty over reform of insolvency practitioners' fees

Uncertainty over reform of insolvency practitioners' fees
Professor Elaine Kempson’s review of Insolvency Practitioner fees published yesterday paves the way for uncertainty as to what reforms may come the profession’s way in the near future. Some of her criticisms are justifiable in some cases (particularly the tendency to over review cases, which in itself is brought about by regulation and risk management, as well as charging for items which solicitors treat as an overhead charge). However, there seems to me to be an under estimating of the cost of pursuing nil asset cases, the investigations and write offs, which are funded by a regulated profession in many cases and serve public policy.

 

Professor Kempson’s sensible suggestion that HMRC and the RPB get together and think about how they can implement better fee oversight is welcome, they represent the taxpayer after all and should surely use their power to benefit creditors as a whole as well as the taxpayers they represent. It is something that has been much suggested but resisted in the past on resource grounds. The fact remains that the power of the unsecured creditor is there and unexercised. If it will truly make such a difference to returns in reduced fees, then how can anyone suggest that HMRC and the RPB will not have the resource to undertake it (save the arcane funding rules of government).Two more valid points which come out of the report are that the Enterprise Act killed off the lively creditors’ meeting as unsecured creditors feel they have little influence and that if attending a creditors’ meeting at all, the main reason to do so is where the creditor suspects the directors of dishonesty.The Insolvency Rules review is suggesting no live section 98 meetings also, which will surely leave creditors feeling arguably more disenfranchised.Professor Kempson echoes the OFT report, stating that banks manage to negotiate lower fees from IPs. However dealing with numerous unsecured creditors with, as she accepts, little understanding of the procedure, as well as very probably more difficult matters such as agreeing claims or pursuing anteced

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About the author:

Frances gained her LLB (Hons) at Kings’ College, London University in 1983. She then attended Chester College of Law to take what were then the Solicitors’ Final Examinations. She has been at Moon Beever since 1984 where she trained, qualifying in 1986, and a partner since 1988 becoming Managing Partner in 2000. She is also a founder partner of ShawnCoulson, an international association, of which Moon Beever is the London office. She is Head of Insolvency and Business Recovery at Moon Beever running a substantial team of insolvency specialists. She undertakes most areas of personal and corporate insolvency, specialising in contentious insolvency especially cases involving fraud, as well as provisional liquidations and injunctive work generally.

She is Chairman of the Appeal Committee at ACCA and a member of the Insolvency Law Evaluation Panel at the Insolvency Service, and CBI Insolvency Panel as well as a member of Insol, and the IBA and, veering towards the personal, of the NFU, and the Carlton Club.

Frances is a regular speaker in the UK and abroad on insolvency and practice management.

Frances was formerly Chairman of the SPG Committee of R3, the Insolvency trade body representing 97% of licensed insolvency practitioners. She is President of R3 for 2011-2012, and remains a member of its R3 Policy Group.

She is interested in all things equestrian as are her three daughters and her husband, and spends her free time (such as it is) with her family and other animals, riding and trying to improve her strokes at Real Tennis.