Annual Report 2009
The IPC’s remit, working methods and priorities
The IPC’s remit is to review whether the professional and ethical standards of IPs are appropriate and whether they are satisfactorily enforced by the RPBs and the Insolvency Service. We were given this task in 2000 because the regulators had concluded that there was a need for an independent “public interest” input on these matters. The professional and ethical standards which IPs are required to follow are set out in primary and secondary legislation and in detailed Insolvency Rules and by the Statements of Insolvency Practice and guidance, including a Code of Ethics, issued by the insolvency regulators collectively. The duties of the RPBs are set out in a Memorandum of Understanding and the Principles for Monitoring issued by the Secretary of State, who authorises them. Since its inception the IPC has commented on all these areas of regulation and on any proposed changes as we have thought necessary.
We are dependent in our work on information which is in the public domain and from discussions with our stakeholders and other parties interested in insolvency and indebtedness, including members of the general public who approach us. We have no powers to collect confidential evidence relating to individual cases or to investigate complaints.
We have regular contacts with the IS and the Accountant in Bankruptcy in Scotland with the seven RPBs both individually and collectively in the Joint Insolvency Committee, with R3 (the IPs’ trade association), with Citizens Advice, the Money Advice Trust, the Bankruptcy Advice Service, the Office of Fair Trading and the Financial Ombudsman Service. We periodically visit individual debt advice organisations such as the National Debt Line, CCCS, Pay Plan and Debt Free Direct and talk to individual IPs we meet at conferences and other meetings.
As a public interest body we focus most of our attention on personal insolvency and over-indebtedness, in particular on the issue of “best advice” and better statistical and other information. This is because there are large asymmetries of knowledge and power between the professionals who give advice and the distressed personal debtors who receive it. In response to the increasing numbers of distressed personal debtors and to the rapid emergence of debt advice firms offering both statutory and informal debt solutions, we have paid increasing attention to the wider debt advice industry and have campaigned actively for greater transparency and more information about DMPs. This is mirrored by decisions of the insolvency regulators to require IPs to have sufficient knowledge of all types of personal debt solutions to give objective advice and the inclusion of informal debt solutions in the examinations which trainee IPs are required to pass.
On the corporate side we took an early interest in “pre-packs” from 2006 onwards and encouraged the adoption of tougher disclosure rules about them. We have also urged the government to ensure that adequate funding is available to investigate reports made by IPs, as administrators or liquidators, on the conduct of the directors of insolvent companies and to follow up with prosecutions and sanctions wherever appropriate. It is essential that all those working in industry and commerce have confidence that wrongful behaviour will be penalised.