R3 concerned over increased cost to insolvency profession

THE INSOLVENCY TRADE BODY is concerned over costs to proposed radical changes to insolvency profession.

R3 president Frances Coulson (pictured) has voiced her concerns regarding reforms of the industry suggested in a consultation by the Insolvency Service, which closed today.

Coulson, managing partner at Moon Beever, is concerned the costs to change the regulatory model may "outweigh" the benefits.

"We support greater transparency and consistency, but the degree of increased regulation proposed is disproportionate and counter to current government policy to reduce red tape," she said.

The consultation looked at three main areas to change including the creation of an independent complaints body and reforming the current regulatory framework.

"Under the new proposals, the cost of making a complaint is free to the complainant, which means that complaints not upheld will be paid for out of the insolvent estate. This will lower returns to creditors. As insolvency cases are a hotbed for vexatious complainants, these are likely to become a more common, yet undesirable, occurrence.

"The Service must balance accessibility with protections against malicious complainants to safeguard creditors' money."

She added that R3 backed a "simpler and more practical solution". The trade body believes the existing structure can be streamlined.