More NewsInsolvency regulator comes under fire over dual role

Insolvency regulator comes under fire over dual role

How should the insolvency profession be regulated and how well does the current system work?

R3 president Nick O'Reilly

R3 president Nick O’Reilly

Those are questions being discussed by insolvency practitioners as regulators
and senior figures grapple with the best way forward.

At its heart is the scope and capacity of the Insolvency Service (IS), the
central government body at the heart of the regulation and licensing of
practitioners.

Though senior figures say the service has improved markedly in recent years,
there are still fears that it still has ‘some way to go’ to fully discharge the
role it has.

‘It’s a big industry to try and please everyone,’ admits R3 president Nick
O’Reilly.

One issue is whether there is a conflict between the service’s role as
regulator and licensee. Several bodies license insolvency practitioners, and
some say the Insolvency Service may be more critical of other bodies’ licensing
work than its own.

Frances Coulson, a member of the R3 council, said: ‘The IS, being a regulator
of and provider of licences, should be looked at. Should it regulate its
competition?’

The issue emerged from a poll of practitioners commissioned by R3 and carried
out by the Centre for Economics and Business Research.

Stephen Speed, inspector general and agency chief executive, said he was keen
to see the results of the research: ‘In reaching a view on the question relevant
factors will be the effectiveness of the overall system of regulation, whether
the interests of creditors and of debtors are well served and whether there are
appropriate levels of competition in the insolvency practitioner market.’

R3 says it had not intended to come across as purely critical, and that the
Cebr research covered the positive contribution of the insolvency industry to
the UK economy.

Writing to Accountancy Age, O’Reilly said: ‘I am immensely proud of
my time working in the Insolvency Service and indeed am the first person to come
through the Insolvency Service to become R3’s President.’

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