Review of Insolvency Practitioner fees

Author: Professor Elaine Kempson
Funded by: The Insolvency Service
Published by: The Insolvency Service
Publication date: July 2013

Concerns continue to be raised regarding the charges, including both remuneration and expenses, made by insolvency practitioners (IPs) and the impact that this has on the position of unsecured creditors and personal debtors in insolvency situations. That such concerns exist is not generally disputed; nor would many claim that there have been no cases involving excessive fees. Beyond that, opinion about the extent of unreasonable, or even excessive, fees is divided. So, too, is opinion on the efficacy of the control and redress mechanisms that exist.  But the evidence base is thin. This review has built on previous work conducted by the OFT and was commissioned to:

The review covers both personal and corporate insolvency, recognising that different conclusions may be drawn for these two separate fields. The main focus is on the procedures that have led to the greatest levels of concern about fees: Administration, Creditors’ Voluntary Liquidation and Compulsory Liquidation, in the corporate sector and bankruptcy in the personal sector. Pre-packaged administrations were not covered as they are the subject of a separate, but related, review. 

This report describes the present system of control on fees (section2) and the fees charged by IPs (section 3), before presenting the evidence on whether or not the existing controls on IP fees are working as intended (section 4) and the evidence relating to the consequences of some controls being ineffective (section 5).  Section 6 presents the conclusions drawn from the review and identifies areas where change is needed.

Review of Insolvency Practitioner fees (PDF, 941kB)

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