News Comment - Wrong emphasis in IP reform paper
David Mond hits out at the insolvency consultation document Ten Years On
Thank goodness Ten Years On is only a consultation document – it raises a lot of questions but the emphasis is all wrong.
The paper was published last week by a Government-backed, cross-institute working party, set up to examine ideas for reforming the regulation of the insolvency profession.
As far as Trade and Industry minister Nigel Griffiths is concerned, the major issue is the profession being seen to be responsible and acting in the public interest.
I’m not sure the urgency of the matter comes through in this document, so let’s be quite clear – if the consultation process doesn’t come up with a consensus of opinion on all the big issues, and in the right direction, decisions will be made for us.
We need to see that insolvency practitioners (IPs) and those responsible for them are easily identifiable, a visible degree of responsibility by IPs for their actions, and a more easily accessible system for satisfying complaints.
Those issues are addressed but I don’t think they have been emphasised sufficiently. Obviously it is important the technical structure – such as compulsory indemnity cover – is there to enable better accountability, access and transparency, but this is now a political issue and this document doesn’t put emphasis in the right places.
We need to address the maze of recognised professional bodies and regulators.
We need one regulator to whom we are all responsible. The only question is who it should be and how it will work. With the best will in the world the working party isn’t likely to vote its constituent bodies out of contention.
When considering both the insolvency board and the ombudsman, the document makes clear the cost would have to be borne by IPs and implies (particularly in the case of the ombudsman) that this would ultimately be a tax on creditors. Surely, if this was not a flat rate levy but a charge on total fees earned, it would make both an insolvency board and an ombudsman viable options while affecting all IPs to an equal extent and penalising all creditors equally (and not by much).
This is surely a small price to pay for public confidence.
– David Mond is a chartered accountant and a partner in Hodgsons, Manchester. He is a member of the SPI Council and sits on the Smaller Practice Issues Committee and Education, Courses & Conference Committee.
