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December 2007
55.50 Insolvency Practitioner Unit (IPU)
IPU is based at Birmingham and is part of the Insolvency Service Policy Directorate. The unit carries out a number of Secretary of State functions in relation to insolvency practitioners, including the appointment of insolvency practitioners on the application of the official receiver (chapter 17) and, where necessary, their removal. The unit is also responsible for the following:
The unit also has several data control functions such as the registration of individual voluntary arrangements (see Chapter 20) and the maintenance of details relating to insolvency practitioners on the insolvency practitioner database.
The unit carries out monitoring visits to insolvency practitioners (see paragraph 55.53 to 55.56) authorised by the Secretary of State and to professional bodies to look at procedures for authorisation, monitoring and handling of complaints.
55.51 Insolvency Practitioner Policy Section (IPPS)
IPPS is based at London and is part of the Insolvency Service Policy Directorate. The main aim of the section is to ensure that there is an effective framework for the regulation of insolvency practitioners. The section provides advice, briefing and other information to ministers, senior officials and other government departments on issues which relate to the regulation of insolvency practitioners. The section also deals with ministerial, chief executive and official correspondence on such issues.
The section promotes the better regulation of insolvency practitioners by having regular meetings and discussions with the RPBs (see paragraph 55.8) and the Association of Business Recovery Professionals (otherwise known as R3) (see paragraph 55.33) and the section is a member of the Joint Insolvency Committee (see paragraph 55.32). The section also provides information and guidance to insolvency practitioners in the form of a periodical publication “Dear IP” (http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/dearip/dearipindex.htm) which is sent to all insolvency practitioners and others who have an interest.
Complaints about insolvency practitioners are dealt with by the body that authorises the practitioner, whether that be the Secretary of State (see paragraph 55.10) or one of the RPBs (see paragraph 55.9). The authorising body is unable to intervene in individual insolvencies, compel a practitioner to do any action or reverse any action carried out by the practitioner. Insolvency, by its very nature, deals with a number of competing interests, most notably between the insolvent and his/her creditors and, ultimately, commercial or other disputes may only be able to be resolved by the courts.
If, on receiving a complaint about an insolvency practitioner, the official receiver knows from which of the RPBs the practitioner receives his/her authorisation (this may be established by reference to the insolvency practitioner database – http://www.insolvency-service.co.uk/newipsearch.htm) the complainant may be directed to that body. For those cases where the practitioner receives his/her authorisation from the Secretary of State, or where the details of the RPB cannot be established, the complainant should be referred to IPPS who will deal with the matter appropriately.
For complaints against those practitioners who receive their authorisation from the Secretary of State, IPU will deal with the complaint. The section will seek information from the complainant and practitioner to establish whether or not to uphold the complaint. The Secretary of State, however, has no power to impose any disciplinary sanction against the practitioner or to order any compensation to be paid. Justified complaints are taken into account when the insolvency practitioner seeks re-authorisation.
The Insolvency Service (in its role as an authorising body on behalf of the Secretary of State) and the RPBs have agreed a memorandum of understanding, which requires the Insolvency Service and the RPBs to subject practitioners to a standard form of monitoring.
The purpose of a monitoring visit is to enable the authorising body to make an objective assessment of the conduct and performance of practitioners authorised by it and to ascertain whether the practitioner is, and continues to be, fit and proper. The monitoring visits are carried out by IPU (see paragraph 55.50).
Every practitioner holding at least one appointment is subject to monitoring visits and when a practitioner begins to accept appointments, the authorising body should arrange an early visit unless it is satisfied that such a visit is unnecessary. Each practitioner should be visited at least once every three years but, if satisfactory risk assessment measures are employed, the gap between visits may be extended to, but not exceed six years. Conversely, targeted interim visits should be carried out if an authorising body becomes aware of concerns about a practitioner’s activities. These concerns may arise from previous monitoring visits, from desk-top monitoring (see paragraph 55.54) or from complaints.
A practitioner who does not hold any appointments and has not held appointments in the period since the issue of authorisation or the previous monitoring visit will not normally be subject to monitoring visits.
The first stage of monitoring is what is referred to as “desk-top monitoring” – that is, the collection of data and information relating to the practitioner from the practitioner themselves and sources independent of the practitioner (for example, a review of the practitioner’s record in respect of filing disqualification returns (see paragraph 55.41) or payments into the Insolvency Service Account – see paragraphs 55.45 and 55.46). Information obtained is considered on the renewal of authorisations and when determining the frequency of monitoring visits
a) Compliance - the monitoring visit will check compliance with all relevant aspects of insolvency law and practice, together with common law and the rules, regulations, educational requirements and bonding requirements of the authorising body.
b) Professional competence - checks on professional competence will include, though not necessarily be restricted to, a review of the following:
Following a visit, a written report would normally be provided to the practitioner within 30 days of the conclusion of the monitoring visit. The authorising body will, following this, be able to make an objective assessment of the conduct and performance of the practitioner authorised by it and to ascertain whether the practitioners are, and continue to be fit and proper.
55.57 Insolvency Practitioners Tribunal - General
The Insolvency Practitioners Tribunal is part of the regulatory regime for insolvency practitioners. It was established in 1986 to provide an avenue for the review of decisions taken by the Secretary of State (or other competent authority) to refuse or withdraw authorisation. The tribunal does not have any involvement with decisions about authorisation taken by RPBs, who have their own review procedures set out in the rules of membership. The tribunal is not a permanent body, it is established each time the need arises.
The Secretary of State is required to draw up and, from time to time, revise a panel of persons made up from those who have a seven year right of audience in the Supreme Court, county court or magistrates court (this is known as a “general qualification”) and a panel of persons who are experienced in insolvency matters [note 1].
When the tribunal is required to sit, its membership is drawn from the panels and consists of a chairman drawn from the panel of those with a general qualification and two other members drawn from the panel of those with experience in insolvency matters [note 2].
Currently, the formation of the tribunal is carried out by The Insolvency Service (Secretariat) and this section also provides the necessary administrative support related to its running. However, responsibility for these areas is to move to the Tribunals Service (http://www.tribunals.gov.uk/) with effect from 1 April 2008. It is expected that appointment of persons to form the panels from which the members of the tribunal are drawn is to remain with the Insolvency Service.
The tribunal has the power to summon witnesses to attend and to produce such books and documentation as the tribunal considers necessary to the investigation. It also has the power to take evidence on oath. Intentional concealment, alteration, suppression or destroying of documents which are required to be produced, or failure to attend a summons is an offence liable to a fine [note 3].
The tribunal may appoint the Treasury Solicitor or Counsel to assist the tribunal in seeking and presenting evidence and representing the public interest [note 4].
55.58 Procedure of the Insolvency Practitioners Tribunal
Currently, there are no competent authorities other than the Secretary of State, so references in the following paragraphs to the Secretary of State can be taken to include other competent authorities should they come into being.
On being required to refer a case to the tribunal (see paragraph 55.13) the Secretary of State must send the tribunal a copy of the notice served by it on the applicant whose authorisation has been withdrawn or refused (see paragraph 55.12) together with a copy of the notification by that person that he/she wishes the case to be referred to the tribunal [note 5]. The Secretary of State must also give notice to the applicant of the date that the case has been referred by it to the tribunal and the address at which the tribunal may be contacted. Following this, the Secretary of State must, within 21 days, send to the tribunal such further information and copies of other documents and records it considers would be of assistance to the tribunal and must send copies of that information and those documents and records to the applicant [note 6]. If there is nothing to be sent to the tribunal, the Secretary of State must inform the tribunal and applicant, again within the specified 21 days [note 7].
Following receipt of the material referred to in the preceding paragraph, the applicant must, within 21 days, send to the tribunal a statement of his/her grounds for requiring the case to investigated [note 8] specifying which matters of fact contained in the written notice (see paragraph 55.13) he/she disputes [note 9], any other matters he/she considers should be drawn to the attention of the tribunal [note 10] and the names and addresses of any witnesses he/she wishes the tribunal to hear [note 11]. The person must also send a copy to the Secretary of State [note 12].
55.59 Investigation by the tribunal
The tribunal will, following receipt of the material referred to in paragraph 55.58, investigate the case, produce a report [note 13] and notify the Secretary of State and applicant of the manner in which it proposes to conduct its inquiries and, in particular, whether oral evidence is to be taken [note 14]. The tribunal must give the Secretary of State and the applicant reasonable opportunity to comment on the manner in which it intends to carry out its inquiries [note 15] and, where appropriate, inform those parties that it has decided to alter the manner of inquiry [note 16]. The tribunal may, at any stage, alter the manner of the inquiry and, if it does so and the change is material, must inform the parties accordingly [note 17].
Should the tribunal wish to examine a witness orally it shall give notice to the applicant requiring the referral to the parties of the time and place at which the examination will be held and allow those parties to put such questions to the witness as may appear to the tribunal to be relevant [note 18]. The parties may be represented by Counsel or a solicitor, or in the case of the Secretary of State an officer of The Insolvency Service and in the case of the applicant any person allowed by the tribunal [note 19]. If the tribunal wishes to take into consideration documentary evidence in the form of computer or other non-documentary records not already placed before the tribunal, it must give the person and Secretary of State the opportunity of inspecting such evidence and taking copies [note 20].
Any written representations made by either party to the tribunal in the course of investigation must be served on the other party [note 21].
After concluding the taking of evidence, the tribunal must give the parties a reasonable opportunity to make such representations on the evidence and on the subject matter of the investigation generally [note 22].
The tribunal must report within four months after the case is referred to it, unless the Secretary of State, on the application of the tribunal, permits the report to be made at a later date. The extension of the four-month period can only be allowed in exceptional circumstances [note 23].
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