COMPLAINTS AGAINST insolvency practitioners come as part of the job. But for a self-regulating profession, that is under fire on several fronts for how it operates, all eyes are on the number of grievances and reprimands.
The Insolvency Service received more complaints per insolvency practitioner than any other licensor. However, its practitioners receive more appointments than any other professional body.
These are just some of the findings in the recently published report on regulation of the profession.
The 2010 Annual Review of Insolvency Practitioner Regulation managed to slip in under the radar as the Insolvency Service released other high profile proposals on the same day.
The report looks at complaints in the profession and how they were dealt with. As a self-regulated industry these types of reports are important to show the public that complaints and concerns are not disregarded.
On 1 January 2011 there were 1,733 insolvency practitioners (IPs) compared to 1,751 in 2010 and 1,734 in 2009. Last year 1,331 IPs took appointments compared to 1,303 in 2009. As appointment taking practitioners increased, complaints by comparison began to decline.
Objections from stakeholders dropped to 531 in 2010 compared with 618 in 2009. According to the Insolvency Service this is equivalent to a reduction in complaints, between the two years, of about 14%.
However, by the Services’ own admission it received proportionately more complaints per practitioner than any of the other licensors (listed in box).
Out of just 88 practitioners it received 55 complaints in 2010 – although, 13 were from the governing body over IPs failing to update information.
The Service is the third smallest licensor out of eight regulators. Yet the percentage of appointment taking IPs outstrips its competition.
In 2011 the ICAEW regulated 686 IPs compared with 79 at the Insolvency Service.
According to experts in the field the nature of the type of work conducted by the profession brings on complaints, as stakeholders more often than not lose money.
The majority of complaints against IPs failed to progress pass the first assessment stage (37% in 2010) where a complaint letter is made to the licensor about the IPs conduct or work.
The biggest complaint against practitioners was over communication breakdown with stakeholders. Liquidations were the most complained-against procedure compared to all other forms, although this is where creditors are likely to receive nominal percentage returns for their debt. In comparison, company voluntary arrangements (which pay out the highest dividend in most administrations) received the lowest number of complaints.
The Office of Fair Trading (OFT) investigated the industry and made a number of recommendations including the introduction of an independent complaints body to encourage confidence in the profession.
Currently stakeholders can complain to a practitioners licensing body and then the Insolvency Service.
Under the OFT recommendations an independent body will also take complaints. The structure would work similarly to an ombudsman. It will be free for anybody to make a complaint with the body, and funding would come from the licensing institutes.
Smaller businesses could be excluded from government plans for making business transactions digital, found new research from ICAEW
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
Colin responds to the call for 'Darwinism' in accountancy