Numerous ‘Perverse Outcomes’ Prompts Parliamentary Review into Insolvency

The All-Party Parliamentary Group (APPG) on Fair Business Banking, supported by law firm Humphries Kerstetter LLP, is to conduct an in-depth investigation into standards in the UK insolvency profession, AccountancyAge.com reported. The APPG on Fair Business Banking is concerned there might be systemic issues with how the corporate insolvency sector is regulated after hearing a number of worrying cases, according to Heather Buchanan, executive director, policy and strategy at the APPG. “There’s no ombudsman and there’s no real mechanism to challenge which just leads to, from what we’ve seen, very perverse outcomes. And sometimes, we certainly see stuff which a layperson would say looks very wrong,” she says. With no ombudsman, independent regulator or tribunal service in place, avenues for redress are limited. The only other option is to go through the courts, but this is fraught with difficulty due to the cost and the “high bar” one must overcome to challenge the conduct of an insolvency practitioner as they are considered “officers of the court”, says Buchanan. “There’s a really high bar to actually challenge their conduct. Notwithstanding the fact that if you’re trying to challenge their conduct and you’re in a position of insolvency, you probably don’t have any money to do it.” Read more.