The IPC came
into being early in 2000 as one of the recommendations of the Insolvency
Regulation Working Party. The Working Party felt that the setting of
professional and ethicalstandards for insolvency practitioners could
and should be influenced by a degree of external perspective. The IPC,
with its majority of lay members, was set up for this purpose. Its remit
is to investigate and examine the professional and ethical standards
of insolvency practitioners (IPs) both in themselves and in the way they
operate in practice, and to make recommendations for possible changes.
is our 5th Annual Report and my last as Chairman. It is therefore perhaps
not inappropriate to look briefly over what we have achieved in the last
5 years. First and foremost we have devoted a good deal of time and effort
getting to know the profession and the issues which it has to tackle.
have visited and talked to IPs in all parts of the UK and I hope our
role is now well understood by all members of the profession. We have
also regularly met the Recognised Professional Bodies (RPBs) both via
the Joint Insolvency Committee (JIC) and individually as well as having
regular contact with the Insolvency Service (IS) and with the Association
of Business Recovery
Professionals (R3). We have equally, as our 4 previous
Annual Reports amply show, endeavoured to contact, talk to, and more
importantly listen to, all those organisations who, in one way or another,
have dealings with insolvency practitioners – the judiciary,
the banks, creditors, Citizens Advice, debt counsellors and many others.
are very grateful to all those, both within the profession and outside
it, who have taken the time and trouble to talk to us and to listen to
concerns which we have raised. There are a number of issues, which have
regularly surfaced in our discussions with those outside the profession
and in some cases with those inside it too. Concern about Individual
Voluntary Arrangements (IVAs), and particularly about whether the debtors
always receive proper and impartial advice, has been high on the list
and indeed still is.
Not surprisingly IVAs have been the subject of several
of our recommendations; these have generally met with a very positive
response from the profession (e.g. the booklet ‘Is an IVA right
for me?’). More recently the IS has set up a working party in conjunction
with the profession to look at ways in which the cost and complexity
of the IVA can be reduced.
The inadequacy of the statistics
in this area, however, remains an issue. Another frequently cited shortcoming
was perceived tardiness or unhelpfulness in replying to correspondence.
Again our recommendation met with a positive response and there has been,
I believe, some improvement but we have found it necessary to revisit
this by way of a new recommendation this year.
Fees and disbursements
are, perhaps inevitably, a contentious issue, not least because outsiders
generally do not appreciate the complex statutory and commercial duties
which IPs have to perform. Nevertheless creditors not unnaturally feel
aggrieved when they see the whole of the returns swallowed up in fees,
as sometimes happens.
We have recommended greater transparency and accountability
and the revised Statement of
Insolvency Practice No.9 has gone a long way in this direction. Not all
our recommendations have been to the profession. We also lobbied, along
with others, for a clearer and more equitable treatment of the matrimonial
home in cases where there had originally been negative equity. A late
amendment to the Enterprise Act secured this. We have subsequently recommended
to the IS that they should issue guidelines for handling such cases,
which they have done.
time to time we have also made recommendations in the area of regulation
and monitoring. These issues largely remain on the table. For regulation
to be effective and fair it needs to be consistent and proactive, and
in a situation where there are multiple regulatory bodies, there needs
to be continuous co-operation between them. The JIC has the potential
to perform an important role in this context and we are encouraged to
note the moves to strengthen it.
In summary, I believe that in our first
5 years the IPC has made a contribution to improving the standards of
the profession and also to improving how it is perceived by others. That
said, I would like to reiterate what I said 2 years ago viz. that the
majority of IPs do a very good job in what are, by definition, often
very difficult circumstances.
Finally I would like to pay tribute to my
colleagues on the Council who have worked together so enthusiastically
over the past 5 years to get the IPC off the ground. My thanks are due
to them all and especially to the retiring members, Caroline Bradley,
Brendan Guilfoyle, Max Lewis and Phil Wallace for their contribution
to our work.
I feel sure that, in the capable hands of my successor, the
IPC will continue to play a useful role in the years to come.
G E A Kentfield