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Dear insolvency
practitioner > Chapter 3 > Authorisation and appointment of
insolvency practitioners
1. Action after loss of Authorisation Where a practitioner ceases to be authorised, it is desirable that a successor practitioner is appointed to deal with any outstanding matters. This can often be achieved in an orderly manner, for example where a practitioner retires and his cases are taken over by a partner. However, it is not simple where an authorisation is withdrawn because the practitioner is considered not to be fit and proper, not least in finding a practitioner willing to be appointed in his place, for example, because there are inadequate records, few or no assets, or suspected dishonesty. The appointment of a successor practitioner is desirable for a number of reasons, i.e. to:
At a meeting between the Service and representatives of the authorising bodies it was felt that the initial obstacle, of identifying practitioners willing to accept appointments as successor practitioners, could be reduced by the setting up of a register of individuals willing to accept such appointments. Practitioners are therefore invited to propose themselves for inclusion on that register, a copy of which will be held by each of the authorising bodies (except the Law Societies) and the Service. Letters, under the heading "Action After Loss of Authorisation" should be addressed to the insolvency practitioners Section, The Insolvency Service, Area 1.10, PO Box 203, 21 Bloomsbury Street, London, WC1B 3QW. The Law Society and the Law Society of Scotland, have in place adequate procedures to deal with the aftermath where the authorisation of a practitioner authorised by them is withdrawn. A "solicitor practitioner" is not barred from being appointed to deal with cases in which an "accountant practitioner" was previously office holder. Practitioners should be aware that no funds, other than those comprised in the insolvency estate, or received under the insolvency bond, can be made available either by the authorising body concerned or the Service, to meet disbursements incurred or remuneration earned by the successor practitioner. (First published in Dear IP no. 33, March 1995) 2. Appointment by the Secretary of State under Section 137 and 296 of the Insolvency Act 1986 This guidance has now been amended. Please see article 12 3. Official Receivers’ rotas – clarification of the criteria to be met by an insolvency practitioner for inclusion on rotas for Secretary of State trustee/liquidator appointments The guidelines to Official Receivers (ORs) concerning entry on to the rotas for Secretary of State trustee/liquidator appointments has recently been updated and this article has been revised to take into account those changes. IPs are reminded that since October 1997 entry on to rotas operated by individual ORs for has been by firm rather than by individual IP. The purpose of the rota is to ensure that ORs cannot be accused of favouring certain IPs. The existence of the rota also seeks to ensure that those concerned with the insolvency are not inconvenienced by the appointment of a distant trustee or liquidator. The criteria: Firms may be placed on an OR’s rota where they have a permanently staffed office with personnel who have sufficient knowledge to be able to deal with debtors, bankrupts, directors and creditors at any time within normal business hours. The IP need not be based in the permanently staff office, but he/she is expected to exercise appropriate supervision of, and give direction to, the day to day casework; conduct regular reviews of papers and files through attendance at that local office or by those papers and files being reviewed at his/her principal office; and be available at the local office for interviews with bankrupts and directors, hold meetings etc. within normal office hours. Clarification of the criteria: The criteria are designed to ensure that the firm has a genuine local presence. It has recently become clear to The Service, however, that firms are arranging to use the office of another business as a device to gain a place on a rota. These arrangements (contractual or otherwise) do not satisfy the criteria for entry on to a rota, as the firm does not have an office within the boundaries of the courts served by the OR, or a genuine local presence. The firm itself must occupy and operate from an office within the boundaries of the courts, permanently staffed by people either employed by, or formally contracted to the firm. There should also be some physical sign of the firm’s occupation of the office, such as a nameplate near or on the door. As long as the criteria are met, there would be no objection to the firm sharing the office premises with another business. Finally, it is the OR’s rota, and so even if satisfied that the firm meets the criteria, he/she may still decide that the firm should not be on the rota. That would, however, be an exceptional situation, and the firm would be notified in writing of the decision and the reasons for it. Other matters Slightly different criteria operate with regard to the Regional rotas operated by, for example PRU (Protracted Realisations Unit) in Birmingham, and IPs are told of the respective entry criteria when each rota is drawn up. General enquiries may be directed to IPU.Email@insolvency.gsi.gov.uk 4. Timing of giving notice of appointment by a Liquidator/Trustee appointed by the Secretary of State IPCU processes and certifies Secretary of State (SoS) appointment applications on receipt from the respective OR’s office and, when issuing the certificate of appointment to the OR, provides a covering letter addressed to the IP advising him/her that no creditors’ committee has been established. It also states that the IP may wish to consider convening a General Meeting for this purpose. Additionally, the letter also reminds the IP of the Regulations (and SIP 9) regarding fees and the relevant sanction required. Sections 137(4) and 296(4) respectively require the appointed office-holder then to give notice of his/her appointment to creditors, or with the court’s permission and in accordance with any directions given, to advertise his/her appointment. The legislation is, however, silent on how soon after appointment this notification should take place. At a recent meeting between the Monitors of the Recognised Professional Bodies and the Insolvency Service this issue was discussed. The general consensus of the meeting of Monitors was that a period of no more than 28 days after appointment seemed to be a reasonable timescale and that, as a matter of Best Practice, IPs should aim to either give notice of appointment to creditors or issue a notice convening a General Meeting within that period. General enquiries may be directed to IPU.Email@insolvency.gsi.gov.uk 5. The
Principles for Monitoring of insolvency practitioners The Secretary of State and the Recognised Professional Bodies (RPBs) have agreed a common set of principles to be adopted when monitoring insolvency practitioners authorised by them. The purpose of monitoring is to enable the Secretary of State and the RPBs to make an objective assessment of the conduct and performance of practitioners, and to ascertain whether the practitioner is a fit and proper person to be an insolvency practitioner. The principles cover the responsibilities of the Secretary of State and RPBs, guidance on the frequency of monitoring visits, key monitoring issues, liaison with other authorising bodies, and recommendations as to the content and timing of written monitoring reports. The agreed Principles are published on the Service’s website at www.insolvency.gov.uk. look under “Information for and about insolvency practitioners”. Practitioners who do not have access to the Internet can obtain a copy of the Principles by telephoning 0207 291 6772. General enquiries may be directed to IPU.Email@insolvency.gsi.gov.uk 6.
Civil Recovery Scheme – Expressions of Interest
in Joining a National Civil Recovery Rota Article Withdrawn December 2006. Please see article 13 7. Guide to Professional Conduct and Ethics The Authorising Bodies, through the medium of the Joint Insolvency Committee, have been working towards adopting a standardised Insolvency Ethical Guide for all insolvency practitioners. The revised Guide is expected to be adopted by most of the Authorising Bodies on 1 January 2004, with others adopting it as soon as their internal procedures allow. The changes have been made to achieve standardisation as Stage One of a two stage review of the Guide. Stage Two will consider more substantive changes and is being conducted initially by the Joint Insolvency Committee. The current amendments are not substantive and should not affect the way in which insolvency practitioners conduct their business. The standardised guide will be published on The Insolvency Service website. General enquiries may be directed to IP Policy Section Email: IPPolicy.Section@insolvency.gsi.gov.uk Telephone 020 7291 6772 8. Appointment by the Secretary of State under Section 137 and 296 of the Insolvency Act 1986 – additional guidance on joint appointments in Official Receiver (OR) rota cases It has been noted that there is some uncertainty and inconsistency as to whether application should be made to the Secretary of State under sections 137 and 296 of the Insolvency Act 1986 for the joint appointment of two or more practitioners in OR rota cases. The guidelines appearing at Chapter 3, Article 2 of Dear IP state, "In a few cases it may be desirable to appoint joint office holders". For example, a joint appointment might be necessary because of size, complexity or geographical location(s) of the insolvent business. Additionally, some firms favour the appointment of joint IPs for practical purposes. This can have a positive benefit to the case by allowing the appointment of local staff as joint office holder rather than the single appointment of a non-resident partner. Consequently, applications for joint appointments may be made by ORs when requested by the creditors or where the circumstances of the case warrant it, or where there is unlikely to be a negative effect in terms of costs. Such a negative effect is unlikely to arise where the proposed joint appointees are from the same firm. If you wish to be appointed jointly with another member of your firm as a matter of course in OR rota cases, it would be helpful if you could notify the relevant OR. When doing so and for the purpose of future appointments, please provide details of your joint appointee (if this is to be constant) and state whether acts done by the liquidator or trustee are to be done by all or any one or more of the office holders (see sections 231(2) and 292(3) of the Insolvency Act 1986). Practitioners may also like to know that the Inland Revenue have indicated that they no longer wish to be consulted in every case where they are not the petitioner. General enquiries may be directed to IP Policy Section Email: IPPolicy.Section@insolvency.gsi.gov.uk Telephone 020 7291 6772 9.
Action after Loss of Authorisation – Successor Practitioner
Register In
March 1995 The Insolvency Service invited insolvency practitioners to
propose themselves for inclusion on a Successor Practitioner Register.
The aim of the Register was to provide a pool of practitioners
willing to accept appointment as successor practitioner, primarily
following the removal of an authorisation due to unfitness. The
Insolvency Service has now discontinued the Register. Each of the Recognised Professional Bodies has developed
their own procedures for selecting a successor in such circumstances
and the Register is no longer required. Where
the Secretary of State removes or refuses an authorisation to act as
an insolvency practitioner in cases involving unfitness, the
insolvency practitioner Database will be used to select a successor
practitioner on the basis of location, resources, experience and
independence. We
would like to take this opportunity to thank those practitioners who
volunteered themselves for the Register. General enquiries may be directed to IP Policy Section Email: IPPolicy.Section@insolvency.gsi.gov.uk Telephone 020 7291 6772 10. Regional
Trustee and Liquidator Units As you will no doubt be aware, over
the last 18 months the Insolvency Service (the Service) has centralised
the trustee/liquidator function that Official Receivers (ORs) carry out
into regional units (details below).
Perhaps not surprisingly, these units are called Regional Trustee
and Liquidator Units (RTLUs). The
purpose of the RTLUs is to take on all trustee and liquidator work which
the OR in the local office would otherwise carry out.
With this in mind, and in line with the emphasis of the
Enterprise Act 2002 to ensure that the best return possible is made to
creditors, the Service will inevitably actively seek practitioner
appointments in fewer asset realisation cases than we have up until now.
This will, in the main,
affect cases with income payments orders or agreements (the OR has been
retaining more of these cases for some time in any event) and
straightforward realisations of assets such as cash at bank or interests
in a bankrupt’s home with a willing purchaser.
In addition, it was previously the OR’s practice to offer
batches of small credit balance cases; RTLUs will not seek the
appointment of a practitioner in these cases but will distribute any
balance to creditors. Bankruptcy
cases which are being dealt with by the Service’s Protracted
Realisations Unit will not be affected.
Article 3 of Chapter 18 (Dear IP Issue 18) refers to these
cases. If, in any case, creditors actively
seek the appointment of a practitioner, the OR will, as now, do whatever
is necessary to effect an appointment, either through a meeting or a
Secretary of State appointment. In
such instances it is unlikely that the case will have been transferred
to the RTLU. However, there
may be some cases that are initially referred to the RTLU in which it
will be appropriate to seek a Secretary of State appointment of a
practitioner. The RTLUs will be using the local office rota system for the
referral of such cases. General
enquiries may be directed to oros@insolvency.gsi.gov.uk; The
RTLUs are/will be located at the following OR’s offices:
11.
Appointment of an insolvency practitioner as trustee following a “no
meeting decision”
Operational
policy guidance has recently been issued to official receivers (ORs)
dealing with requests from insolvency practitioners (IPs) who are
seeking appointment as trustee following a “no meeting decision”.
Since
the introduction of its new financial regime in 2004 the Service has had
a policy of retaining and dealing with straightforward realisation cases
with the intention of increasing returns to creditors in those cases. In
addition, further operational policy guidance was introduced in October
2005 in situations where insolvency practitioners are seeking
appointments following the no meeting decision. In exercising his
discretion the OR has an implicit duty to consider what is in the best
interests of creditors when deciding to call a first meeting or when
seeking a SoS appointment. This guidance relates only to bankruptcy
cases. The
aim of the additional guidance is to:
It
applies to requests for the appointment of a particular IP after a
notice of no meeting has been issued. Where
the IP has identified additional recoveries that could be made or can
show that they have access to specific information which could bring to
light further assets the OR will consider acceding to the request for an
SoS appointment. The OR will need to be satisfied that the potential
assets amount to more than speculation by the practitioner.
Where the OR is not convinced that further assets will come to
light and that the return to creditors could be at risk the following
guidance will come into play:
Where
the creditor or the IP representing them has been asked to seek the
support of additional creditors the OR will upon request provide a list
of creditors. If a creditor is seeking to appoint an IP in order to
carry out a detailed investigation this should not be at the potential
expense of the other creditors whose interests the OR must seek to
protect. It would be for the insolvency practitioner to convince the OR,
or in the alternative other creditors, as to the benefits of any
proposed investigation so
that they will be persuaded to support the IP’s nomination. Any
IP who feels that their request has been declined unfairly should write
to the appropriate regional director seeking a review of that decision.
12.
Guidelines for the Appointment by the Secretary of State
under Sections 137 and 296 of the Insolvency Act 1986 NB article 2 of this chapter has now been
withdrawn The
Guidelines have been changed to enable official receivers to apply to
the Secretary of State for the appointment from their rota of an
insolvency practitioner as trustee in cases that are two or more years
old and where the principle asset is an interest in a dwelling house
which at the date of the bankruptcy order was the sole or principal
residence of the bankrupt, their spouse/civil partner or former
spouse/civil partner without first seeking the views of creditors. The
change to the Guidelines has been made due to the special nature of
these property interest cases, the limited time available to the
insolvency practitioner trustee to realise the asset before it re-vests
in the bankrupt and the difficulty in consulting creditors given the
passage of time since the bankruptcy order.
A
copy of the revised Guidelines are published on the Insolvency Service
website at www.insolvency.gov.uk/freedomofinformation/ipps/SoSguidelines.pdf Any enquiries regarding this article should be directed towards Insolvency Practitioner Policy Section, Area 5.6, 21 Bloomsbury Street, London WC1B 3QW telephone: 020 7291 6765 email: IPPolicy.Section@insolvency.gsi.gov.uk 13. National Civil Recovery Rota – an UpdateNB article 6 of this chapter has now been withdrawn This
rota was first introduced on 1 January 2004 for Official Receivers to
use in cases in which there is potential for civil recovery action but
which have no funding from creditors nor can an agreement for repayment
be made with the relevant parties. Some 57 firms agreed to go on the
rota and to date there have been a total of 23 appointments. As
can be seen this rota has been rarely used and the Service feels that
this may be for a number of factors, including:
Despite
the apparent lack of use of this rota, the Service continues to feel
that it fulfils its purpose and acts as a rota of last resort.
Consequently, we intend to keep it running. However, if any firm would
like to be removed, or added to this rota, then please contact David
Chapman/Linda Dellicolli on 020 7637 6397. General
enquiries may be directed to oros@insolvency.gsi.gov.uk; 14.
Regional Trustee/Liquidator Units (RTLUs): an update
It
is now nearly 5 years since RTLUs were created by The Insolvency Service
(The Service). The purpose of this article is to give an updated
position on the work that these offices undertake. Since
the introduction of the RTLUs, in addition to the sort of cases in which
an official receiver will act as trustee or liquidator of last resort
(i.e. those cases in which either there are no assets, or the assets are
such that their value is minimal or they are long-term), The Service is
keeping more straightforward asset realisation cases, which will result
in a distribution to creditors rather than looking to pass such cases
out to an insolvency practitioner (IP). However, if creditors have
sought the appointment of an IP, Chapter 17 of the Technical Manual sets
out the procedure that should be followed. Access to the technical
manual is available via the Insolvency Service website at http://www.insolvency.gov.uk/freedomofinformation/index.htm
- look under “ 8) Policy and Technical Directorate” An
RTLU is not a “closings unit” and as such will not usually deal with
debit balance closings. They
have been created as specialist units to deal with cases in which: (a)
there is likely to be a distribution to creditors; or (b)
in which the assets are not likely to attract an IP but will be
time-consuming for the home OR to deal with. In
the latter cases, the RTLU will deal with the following: a)
The realisation of an estate’s assets (regardless of value) in
straightforward cases including (but not limited to) jointly and solely
owned property where there is a willing purchaser, jointly and solely
owned property where there is no willing purchaser but the value is
insufficient to attract the appointment of an IP, property which is in
negative equity, shares, life policies, collecting and monitoring
payments under an income payments order/agreement (IPO/IPA), and book
debts. b)
Monitoring fast track voluntary arrangements (FTVAs), post
creditor acceptance. This
will include processing applications for annulment in these cases, such
applications being made without the need to attend at court. c)
Realising or otherwise dealing with an estate’s interest in
long- term assets regardless of value and complexity, where the case
will not attract the appointment of an IP. For this purpose a long- term
asset is one that cannot be realised quickly by the home office – e.g.
a pension policy, a company pension scheme, long-term litigation issues
and recovery actions. d)
The administration of all cases it deals with to a conclusion,
including the early discharge process. The RTLUs are
located at the following offices:
General
enquiries may be directed to oros@insolvency.gsi.gov.uk; 15. Information to be included in a blanket authority given by a creditor to an insolvency practitioner Where an insolvency practitioner holds an authority to act on behalf of certain creditors it is important that the scope of the authority is clear. To assist official receivers, creditors and insolvency practitioners the following guidance has been prepared and it would be helpful if insolvency practitioners could ensure that any new authority prepared for use in bankruptcies and compulsory liquidations addresses the following issues: (i) The authority should be on the headed notepaper of the creditor including the address and registration details. (ii) The name and job title of the person signing the authority on behalf of the creditor should be printed. (iii) A statement that the person signing the authority is authorised to give the authority. (iv) The contact details of the person signing the authority should be included; address, telephone and email if available. (v) The letter should be signed and dated. (vi) The authority will be retained by the official receiver for two years after which it will have deemed to have lapsed and should be renewed by the creditor. The following wording would be acceptable to official receivers. We hereby authorise [name of IP*] to act on our behalf in matters related to all insolvent estates of which we are creditors as follows: - 1) Pursuant to rules 4.75(1)(g) and 6.98(1)(g) of the Insolvency Rules 1986 to complete and sign forms of proof of debt on our behalf; 2) Pursuant to rule 8.2(3) of the Insolvency Rules 1986 to complete and sign forms of proxy on our behalf:- a) by way of special proxy for the appointment of [name of IP*] as office holder under the provisions of the Insolvency Act 1986, or b) by way of special proxy for the appointment of any licensed insolvency practitioner as office holder under the provisions of the Insolvency Act 1986. 3) To act as our agent and obtain lists of creditors pursuant to rule 12.17 of the Insolvency Rules 1986. 4) In the event that the official receiver decides to request that the Secretary of State appoint an insolvency practitioner, in all cases where we are the majority creditor, we wish [name of IP*] to be appointed office holder under the provisions of the Insolvency Act 1986. Should [name of IP] decline to accept the appointment, on our behalf [name of IP] may agree to an appointment from the official receiver’s rota. 5) In the event that the official receiver decides to request that the Secretary of State appoint an insolvency practitioner and we are not the majority creditor, [Name of IP*] may on our behalf approve: an appointment from the official receiver’s rota, or b) the appointment of an insolvency practitioner nominated by another creditor. Any of the above may be deleted by the creditor and excluded from the authority. Where the official receiver receives a later dated authority from the creditor for another insolvency practitioner it will be assumed that the creditor has withdrawn the earlier authority and the official receiver will be under no obligation to make enquiries. The official receiver will accept an authority that refers to “an insolvency practitioner from [name of firm]”, rather than a specifically named insolvency practitioner, or in the case of proxy holders “an employee of [name of firm]”, rather than named individuals. The Insolvency Service appreciates that some insolvency practitioners already hold authorities which date back some years. For the sake of clarity it would be helpful, if where an insolvency practitioner holds an authority which is more than two years old, for the insolvency practitioner to obtain an amended authority that complies with this new guidance. Insolvency practitioners might wish to know that Official Receiver Services (ORS) will maintain details of all authorities on a central database and that this will be accessible by local official receivers and their staff. Any enquiries regarding this article should be directed towards Alex Cleland, Official Receiver Services, Insolvency Service, 21 Bloomsbury Street, London WC1B3QW; telephone: 07772 795 383 email : alex.cleland@insolvency.gsi.gov.uk General enquiries may be directed to OROS@insolvency.gsi.gov.uk ; telephone: 0207 291 6772 16. Urgent Secretary of State appointments – agreements in principle Insolvency practitioners may be aware that the Insolvency Practitioner Unit of the Insolvency Service (“IPU”) has delegated responsibility on behalf of the Secretary of State to consider applications from official receivers for the appointment of a trustee or liquidator in place of the official receiver in circumstances where it is not expedient to hold a first meeting of creditors. Urgent applications are made by telephone to IPU in order to seek agreement of the appointment and most importantly agreement of the effective date. Following that agreement, the official receiver will send the appropriate form to IPU together with two draft certificates of appointment to be signed by IPU on behalf of the Secretary of State and returned to the official receiver to be handed over to the appointed insolvency practitioner together with other appropriate documents. Instances have arisen where insolvency practitioners acting in the capacity of duly appointed office holders have encountered difficulty in carrying out their role immediately upon appointment due to the delay in receiving the certificate of appointment. Accordingly, in the interests of providing best public service, in future where an urgent appointment has been sought and agreed between the official receiver and the Secretary of State, IPU will despatch a signed copy of the certificate of appointment direct to the insolvency practitioner, the other copy will be sent to the official receiver as normal. The new process applies only to urgent agreements in principle. In routine Secretary of State appointments the certificate of appointment will be sent to the official receiver for handing over to the insolvency practitioner together with the case records. Any enquiries regarding this article should be directed towards Joe Clogan at Insolvency Practitioner Unit, Fourth floor, Cannon House, 18 Priory Queensway, Birmingham, B4 6BS; email: joe.clogan@insolvency.gsi.gov.uk General enquiries may be directed to email IPU@insolvency.gsi.gov.uk 17. Publication of Official Receiver rotas on Insolvency Service website The Insolvency Service has published details of the rotas used by Official Receivers when seeking the appointment of insolvency practitioners as trustee or liquidator. The rotas can be found on our website at the link below: http://www.insolvency.gov.uk/foi08/cat6.htm Insolvency practitioners are reminded that decisions as to whether or not to include an insolvency practitioner on any particular rota are a matter for the relevant Official Receiver. Any queries regarding the operation of the local rota, or requests for information to be updated/corrected, should be addressed to the relevant Official Receiver. Guidance for Official Receivers on the criteria for inclusion on a rota are also available on our website, at the following link: http://www.insolvency.gov.uk/foi08/docs/Guidelines%20for%20Official%20Receivers%20on%20Rotas.doc Any enquiries regarding this article should be directed towards Lydia Chown, Official Receiver Operations Section, 21 Bloomsbury Street, London WC1B 3QW. Telephone: 020 7637 6393, email: lydia.chown@insolvency.gsi.gov.uk General enquiries may be directed to IPPolicy.Section@insolvency.gsi.gov.uk Telephone: 020 7291 6772 18. Obtaining insolvency appointments through on-line introducers It has come to The Insolvency Service’s attention that a number of insolvency ‘introducer’ businesses have been advertising their services on the internet, particularly, although not exclusively, in the context of pre-pack administrations. A number of these websites appear to be making dubious statements which may be misleading, unethical or factually incorrect. Examples of such statements include:
The Insolvency Service is concerned that this type of advertising may result in businesses that may in fact be viable or otherwise saleable being sold back to existing management without any attempt to undertake proper marketing or valuation exercises and that this may result in reduced realisations for creditors. The Insolvency Service has received a number of representations from interested parties expressing concern about this issue and is concerned to ensure that insolvency practitioners accepting work from these sources have the appropriate safeguards in place to ensure that actual or perceived threats to the fundamental ethical principles are eliminated or reduced to an acceptable level. Insolvency practitioners may therefore wish to take particular care when accepting appointments from such sources and may wish to consider that directors could have received pre-insolvency advice that is potentially inaccurate and/or misleading. The Insolvency Service is aware that only a very small number of disclosures to creditors in pre-pack administrations pursuant to SIP 16 identify that the source of the insolvency practitioner’s introduction was such a business entity providing advisory or introductory services. Insolvency practitioners are reminded that if they obtain an introduction to the company through such an entity’s involvement then they are obliged to disclose this fact to creditors. Misleading advertising and the Insolvency Ethical Code In the context of the advertising content contained in the websites of insolvency introducers, The Insolvency Service wishes to draw insolvency practitioners’ attention to paragraphs 63 to 69 “Obtaining insolvency appointments” of the Insolvency Code of Ethics (ICE). Paragraph 63 of ICE provides that the payment or offer of any commission or valuable consideration towards the introduction of an insolvency appointment is inappropriate. The only exception to this being whereby specific arrangements are in place with an employee of the insolvency practitioner whose remuneration is based in whole or part on introductions obtained. Paragraph 65 states that before accepting an insolvency appointment the insolvency practitioner should satisfy himself that any marketing or advertising which may have given rise to the appointment was fair, not misleading, does not contain unsubstantiated statements and complies with relevant codes of practice in relation to advertising. Paragraph 66 states that any advertisements or other marketing should be clearly distinguishable as such and be legal, decent, honest and truthful. Paragraph 69 provides that where an insolvency practitioner or his firm advertises for work via a third party, it is the responsibility of the insolvency practitioner to ensure that third party follows the advertising guidance in the ICE. The Insolvency Service therefore considers that insolvency practitioners:
The Insolvency Service will report any insolvency practitioner to their authorising body where we become aware that insolvency appointments have been obtained on the basis of advertising that is in breach of the ethical code, or where the insolvency practitioner has not taken appropriate steps to eliminate or reduce threats to the fundamental ethical principles by making appropriate disclosures to creditors. Any enquiries regarding this article should be directed towards: Toby Watkinson, IP Policy Section, Area 3.7, 21 Bloomsbury Street, London WC1B 3QW; telephone: 020 7637 6566; email: toby.watkinson@insolvency.gsi.gov.uk Enquiries regarding this article may be directed to IPPolicy.section@insolvency.gsi.gov.uk Telephone: 0207 291 6772
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