INSOLVENCY PRACTITIONERS across the country will see the way they work with the government on bankruptcy and liquidation cases significantly changed this year.
There will be a radical overhaul for insolvency practitioners (IPs) signed up to undertake cases handed over by the government's Official Receiver.
Currently, local receivers' offices pass on liquidation and bankruptcy cases to IPs on a rota system. However, under the new system, inclusion will be on a firm basis rather than as an individual IP, and the practice will have to reconfirm it meets criteria – still to be announced – to stay on the rota, every two years.
Other changes will include: IP appointments and cases they reject could be published every quarter; if an IP repeatedly declines appointments, the receiver may remove it from the rota; the rota will be available on the Insolvency Service website; and the receiver will periodically undertake an audit of the rota and its operation.
A letter was sent by the government to practitioners explaining the current situation.
"In many ways, the operation will remain the same but the aim is to ensure transparency and fairness of appointments. To do this, it has been decided that the rotas will be reconstituted," stated an extract from the letter, signed by head of Official Receivers' business services Paul Cropper.
The insolvency trade body R3, which represents more than 90% of the profession, and the Insolvency Service have worked together to create the new rota system for IPs.
The new criteria should be published later in the summer. In August, R3 will send letters to its members' firms, asking them to apply for inclusion on the rota and informing them of the new criteria. It is hoped the details, including those firms listed on the rota, will be finalised in mid-September with roll-out to begin on 1 October.
Lee Manning, R3 president, said: "The changes agreed include registration by firm rather than by individual. The tightening up of criteria requires the registration to be to a full-time manned office.
"The registration of compliance is certified biennially, with false declarations likely to be reported to the IPs' recognised professional bodies. All of which means there should be fewer false declarations, increased confidence in how the profession operates and a fairer distribution of work between firms."
The current position is that this new scheme has been scrapped.
Please update your news on this.
The OR are looking at another scheme and that is why most practitioners never received any letter.
Posted by: David Mond, 26 Jul 2012 | 11:33
Accountancy Age contacted both R3 and the Insolvency Service the day this article was published. They both confirmed changes will take place.
We have since spoken to both organisations which both continue to confirm that changes will occur this year.
A letter should be sent to insolvency practitioners this month giving more detail on the changes.
Accountancy Age editorial
Posted by: Rachael Singh, 08 Aug 2012 | 12:11
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