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Chairman's Report

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.

This 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.

We 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.

We 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.

From 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
Chairman

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