Several sections of the Insolvency Act 2000 came into force on 2 April 2001, and others will follow in autumn.
As I write I have no idea where the new government will place insolvency reform on their agenda, or what we can expect in terms of legislation.
The Insolvency Practitioners Association, of which I am to be president this year, is a recognised professional body and as such a regulator of the insolvency profession. Whatever the new government does, I beg for clarity. It is very important, for guidance and regulation, that insolvency practitioners have a clear and concise framework. Only then can the profession carry into execution the aspirations of the government.
I would expect the review of company rescue and business reconstruction mechanisms to continue, but in my view it will be some time before it comes up with clear recommendations.
At that point it will have to be decided whether such recommendations should be encompassed in legislation (an Insolvency Act 2002 – heaven help us!) or by way of best practice guides issued by the Association of Business Recovery Professionals (R3) in consultation with the Joint Insolvency Committee of the Recognised Professional Bodies.
The document, Bankruptcy – A Fresh Start, will be revisited as I expect the new government to continue to develop a culture of responsible risk taking.
As Stephen Byers MP said: ‘UK attitudes are among the least supportive of entrepreneurs. This is very serious since a person is only likely to start a business if success brings social recognition and failure does not mean public humiliation.’
Perhaps I state the obvious when I say a balance must be drawn between encouragement and punishment.
It is the job of the regulators to ensure that, when a serial delinquent businessman seeks to take advantage of entrepreneurial opportunities by driving a coach and horses through the legislative framework, he cannot find an insolvency practitioner who will encourage and help him.
The aspirations of the present government, as far as insolvency law is concerned will probably be carried into the next parliament, and whilst they are laudable it should not be forgotten that ‘the road to hell is paved with good intentions’.
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