Strengthening the regulatory regime and fee structure for Insolvency Practitioners

11/03/14

Members may be interested to know that the Insolvency Service published a consultation paper on 17 February 2014, entitled "Strengthening the regulatory regime and fee structure for Insolvency Practitioners".  The consultation ends on 28 March 2014, and the consultation documents are available here. In the case of fees, the consultation paper follows a number of the recommendations set out in Professor Kempson's review, issued in July 2013. 

The proposals set out in the consultation paper include:

• restricting the use of time and rate as a basis for the IP's remuneration to cases (other than IVAs, CVAs or MVLs) where there is either a creditors' committee or a secured creditor who remains in control of fees; 
• requiring a proposal to take fees as a percentage of realisations to be approved by a simple majority in value of creditors voting, with the statutory scale being the fall back position; 
• the introduction of regulatory objectives (including a role in monitoring fees) for recognised professional bodies (RPBs); 
• a range of sanctions (including a financial penalty) which would be available to the Secretary of State where a RPB is not acting in accordance with those objectives; and 
• a power for the Secretary of State to apply to court to directly sanction an IP in the public interest (including for an order for the repayment of fees to the insolvent estate).

This consultation follows those conducted last year in relation to the Red tape Challenge and the Deregulation Bill, the Technical Committee's responses to which can be found on the website.

Red tape Challenge

Deregulation Bill

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