The Insolvency Act 1986
Principles for Monitoring of insolvency practitioners
The Insolvency Service as an authorising body and the
Professional Bodies recognised by The Secretary of State
for the purpose of authorising insolvency practitioners
(together referred to herein as "the Bodies") have
agreed a Memorandum of Understanding which has been
signed by all the Bodies. The Memorandum of
Understanding requires the Bodies to subject authorised
practitioners to monitoring in accordance with a
Standard for Monitoring to be agreed between the
Secretary of State and the Bodies.
2 Purpose of Monitoring
The purpose of monitoring is to enable each of the
Bodies 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.
3 Achieving the Purpose
It is the responsibility of each of the Bodies to
ensure that the practitioners authorised by it are
monitored in accordance with this Standard. This
responsibility will remain even if the monitoring is
carried out by a third party.
3.2 Desktop Monitoring
Reasonable steps should be taken to obtain all
available information from insolvency practitioners and
from sources independent of practitioners to assist in
achieving the purpose of monitoring. Information so
obtained shall be considered on the renewal of
authorisations and when determining the frequency of
3.3 First Appointments as an Office Holder
When an authorised practitioner begins to accept
appointments as an officeholder, the authorising body
should arrange an early monitoring visit unless it is
satisfied that such a visit is unnecessary.
3.4 Monitoring Visits
Every practitioner holding at least one appointment
as an insolvency officeholder shall be subject to
monitoring visits. The frequency of visits shall be
determined by each of the Bodies having regard to the
3.4.1 The period between monitoring visits is
normally expected to be 3 years.
3.4.2 If satisfactory risk assessment measures are
employed, the gap between visits may be extended but
must not exceed 6 years.
3.4.3 Targeted interim visits should be made if a
Body becomes aware of concerns about a practitioner’s
activities. Such concerns may arise from previous
monitoring visits, from desktop monitoring, from
complaints or otherwise.
A practitioner who does not hold any appointments as
an insolvency officeholder, and has not held such
appointments in the relevant period will not normally be
subject to monitoring visits. However such a visit may
be undertaken if the authorising body considers it is
appropriate to do so. The relevant period for this
purpose is the period since the issue of the
authorisation or the previous monitoring visit,
whichever is the later.
4 Key Monitoring Issues
Steps should be taken to check satisfactory levels of
compliance with all relevant aspects of insolvency law
and practice including the following legislation:-
The Insolvency Act 1986 and all subsidiary
legislation including the Insolvency Rules 1986, the
Insolvency Regulations 1994 and The insolvency practitioners Regulations 1990 (all as amended)
The Company Directors Disqualification Act 1986 (as
Other relevant legislation.
The Bankruptcy (Scotland) Act 1985 and the Bankruptcy
(Scotland) Act 1993, the Insolvency Act 1986 and all
subsidiary legislation, including the Insolvency
(Scotland) Rules 1986 and The insolvency practitioners
Regulations 1990 (all as amended) The Company Directors
Disqualification Act 1986 (as amended).
Other relevant legislation
The Insolvency (Northern Ireland) Order 1989 and all
subsidiary legislation including the Insolvency Rules
(Northern Ireland) 1991, the Insolvency Regulations
(Northern Ireland) 1996 and the insolvency practitioners
Regulations (Northern Ireland) 1991 (all as amended)
The Companies (Northern Ireland) Order 1989 (as
Other relevant legislation
The bye-laws, rules, regulations and continuing
professional education requirements of the Body.
4.2 Professional Competence
Checks on professional competence should include, but
not necessarily be restricted to, a review of the
4.2.1 The systems and controls employed by the
practitioner to ensure the proper conduct of their work.
4.2.2 The ability of the practitioner to carry out
the work which they undertake. This should include an
examination of the facilities available to the
practitioner, and the competence and suitability of
their partners, fellow principals, staff and sub
contractors and the suitability of professional
advisers, agents and contractors.
4.2.3 The level of control exercised by the
practitioner in cases where they are the office holder.
4.2.4 The financial systems employed by the
practitioner including a check on the way in which
remuneration and disbursements are authorised and drawn
and receipts and payments are handled and accounted for.
4.2.5 Whether there are regular occurrences of undue
or unwarranted delays in dealing with the officeholder’s
duties or with correspondence.
4.2.6 The procedures for and manner of dealing with
4.2.7 Any undue influences to which the practitioner
is exposed including financial, emotional, professional
or those exerted by significant work providers.
5 Practices with Authorisations from more than one
It is not unusual for a firm or practice to include
partners and staff who are authorised by different
authorising bodies. In these circumstances the following
5.1 Wherever practical the authorising bodies or
their monitoring agents should liase with a view to
undertaking a combined monitoring visit.
5.2 If there is no joint visit and a monitoring visit
to one practitioner highlights shortcomings in the work
undertaken on cases by a practitioner authorised by a
different Body, a note of those shortcomings should be
provided to that Body whether or not the practitioner is
an office holder.
6 Joint Appointments
Where a monitoring visit to a practitioner highlights
shortcomings in the work undertaken on cases by a joint
appointee who is licensed by another Body, a note of
those shortcomings should be provided to that Body as
soon as possible.
7 Monitoring Reports
A written report should normally be provided to the
practitioner and the Body within 30 working days of the
conclusion of the monitoring visit. Any serious matter
for concern shall be reported to the Body as soon as
Reports should be sufficiently detailed to assist
each of the Bodies 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.