1. Overview
The Insolvency Service is an executive agency of the Department of Business, Energy and Industrial Strategy (BEIS) that helps to deliver economic confidence by supporting those in financial distress, tackling financial wrongdoing and maximising returns to creditors.
For Great Britain, the Secretary of State, by Order, recognises independent professional bodies, known as the Recognised Professional Bodies (RPBs) for the purpose of authorising their members to act as Insolvency Practitioners. Under the provisions of the Insolvency Act 1986, any individual who acts as a liquidator, trustee in bankruptcy, administrator, administrative receiver, or as nominee or supervisor of a voluntary arrangement must be authorised to act as an Insolvency Practitioner by an RPB.
Acting as oversight regulator of Insolvency Practitioners on behalf of the Secretary of State for BEIS, the Insolvency Service works with the insolvency profession ensuring that professional and regulatory standards are maintained or improved where necessary, and that professional misconduct is addressed. The Insolvency Service actively monitors the RPBs through a combination of desktop monitoring, inspection visits and themed reviews, details of which are published on the Agency’s website. The regulatory objectives of the Insolvency Practitioner regime found in the Insolvency Act 1986 which both the Insolvency Service and the RPBs work to achieve are:
-
Having a system of regulating persons acting as Insolvency Practitioners that secures fair treatment for persons affected by their acts or omissions, reflects the regulatory principles and delivers consistent outcomes.
-
Encouraging an independent and competitive Insolvency Practitioner profession whose members provide high quality services at a cost to the recipient which is fair and reasonable, act transparently and with integrity, and consider the interests of all creditors in any particular case.
-
Promoting the maximisation of the value of returns to creditors and the promptness making those returns. And,
-
Protecting and promoting the public interest.
The Complaints Gateway acts as a single point of contact for making a complaint about the conduct of an Insolvency Practitioner and enables the Insolvency Service to monitor the progress and outcome of those complaints.
For Great Britain, during 2021, Insolvency Practitioners were regulated by four RPBs [The Law Society of Northern Ireland is recognised by the Department for the Economy in Northern Ireland]
-
Chartered Accountants Ireland (CAI)
-
Institute of Charted Accountants in England and Wales (ICAEW)
-
Institute of Chartered Accountants of Scotland (ICAS)
-
Insolvency Practitioners Association (IPA)
The Association of Chartered Certified Accountants (ACCA) ceased to be listed as an RPB following the Insolvency Practitioners (Recognised Professional Bodies) (Revocation of Recognition) Order 2021, which took effect from 1 March 2021.
New regulations came into force on 30 April 2021 to improve transparency of pre-pack administration where the sale is to a connected person. The regulations provide that an administrator cannot proceed with a sale to a connected person within the first 8 weeks of administration unless there has either been creditor approval of the sale, or the connected person has obtained an opinion on the sale from an independent evaluator.
The evaluator must state whether or not they are satisfied that the consideration and grounds for the sale are reasonable. The administrator is not bound by the opinion of the evaluator and, if the administrator considers it is in the best interests of creditors to do so, can proceed with the sale, even if the evaluator is not satisfied that the sale is reasonable.
The administrator is required to send a copy of the evaluator’s report (which may exclude any information that is confidential or commercially sensitive), and, where appropriate, any statement made on the reasons for proceeding with the sale, to Companies House and to creditors of the company.
In December 2021, the Insolvency Service published a consultation on the way the insolvency profession is regulated. This included proposals to establish a single independent regulator to sit within the Insolvency Service, replacing the current system of using Recognised Professional Bodies; extending regulation to firms that offer insolvency services; creating a public register of all individuals and firms that offer insolvency services; creating a system of compensation and redress; and amending the current arrangements for Insolvency Practitioners to hold security (bonding) to cover losses in the event of fraud or dishonesty.
This report sets out various data relating to regulatory activity during 2021. The data are derived from information obtained annually from the RPBs and the Complaints Gateway.
2: Changes in regulations, procedures and bye-laws
ICAEW
ICAEW has an ongoing project to revise its Disciplinary Bye Laws and to introduce new Investigation and Discipline Regulations. In 2021 ICAEW made some changes to its Supplemental Charter concerning the future governance of changes to the Disciplinary Bye Laws and the supporting disciplinary regulations. Additionally, some miscellaneous amendments were also made to the Principal Bye Laws. Most of the changes to the Principal Bye Laws were of a minor/housekeeping nature, but there were substantive changes to the provisions around continuing professional development for ICAEW members.
During 2021, there was a policy change on the chairing of disciplinary tribunals, moving to having lay chairs rather than legally qualified chairs.
IPA, ICAS, CAI
There have been no material changes in regulations, procedures or bye-laws for the IPA, ICAS or CAI since the previous report relating to 2020.
3: Regulatory and Disciplinary Statistics
3.1 Authorisations
Table 1: Number of authorised Insolvency Practitioners (2021-2022)
| Year |
Category |
ICAEW |
IPA |
ICAS |
CAI |
Total |
|-|-|-|-|-|-|-|
| 2021 |
IPs at 1 January |
820 |
617 |
87 |
46 |
1570 |
| 2021 |
Of which Appointment takers |
648 |
523 |
74 |
43 |
1288 |
| 2022 |
IPs at 1 January |
812 |
592 |
90 |
47 |
1541 |
| 2022 |
Of which Appointment takers |
628 |
506 |
76 |
44 |
1254 |
3.2 Monitoring
Table 2: Number of RPB monitoring visits to Insolvency Practitioners carried out in 2021
| Visit Type |
ICAEW |
IPA |
ICAS |
CAI |
|-|-|-|-|-|
Data in Table 2 relates to visits that were carried out and completed in 2021. It does not include visits that were scheduled in 2021 but were not complete by the end of the year, nor that started in 2021 but were not complete by the end of the year.
Monitoring activity by RPBs continues to be strong despite challenges stemming from the Covid-19 pandemic.
In relation to monitoring visits undertaken by the IPA, 103 of the routine monitoring visits undertaken were in relation to IVA providers who are part of the IPA’s Volume Provider Regulation Scheme. No targeted visits were required in relation to those providers.
Table 3: Volumes of outcomes in 2021, following routine monitoring visits to Insolvency Practitioners
Note: Visit outcomes can fall into more than one category
| Category |
ICAEW |
IPA |
ICAS |
CAI |
Total |
|-|-|-|-|-|-|
| Satisfactory – no further action |
61 [footnote 2]
|
143 |
2 |
0 |
206 |
| Further visit to be carried out |
2 |
2 |
2 |
3 |
9 |
| Further visit carried out |
0 |
1 |
0 |
0 |
1 |
| Licence restricted |
0 |
3 |
0 |
1 |
4 |
| Licence withdrawn |
0 |
0 |
0 |
0 |
0 |
| Plans for improvement |
0 |
0 |
2 |
0 |
121 |
| Compliance review requested |
12 |
0 |
0 |
0 |
12 |
| Decision not finalised |
0 |
4 |
16 |
0 |
20 |
| Warnings/conditions/progress reports |
0 |
4 |
0 |
0 |
4 |
| Disciplinary referrals |
0 |
0 |
0 |
0 |
0 |
| Consent Orders/regulatory penalties [footnote 4]
|
2 |
10 |
0 |
0 |
12 |
| Further investigation |
2 |
0 |
0 |
0 |
2 |
| Additional monitoring (VPL scheme) |
0 |
0 |
0 |
0 |
0 |
Figures shown in Table 3 relate to outcomes where those have been put to the RPB’s relevant Committee (where appropriate) in 2021.
The figures given reflect similar patterns to those seen in 2020 and demonstrate the important role of monitoring visits in examining the Insolvency Practitioners’ work, identifying areas for improvement and contributing to the regulatory and disciplinary framework.
The information given in Table 3 includes the outcomes of monitoring visits undertaken by the IPA to firms participating in their Volume Provider Regulation Scheme. In relation to those firms, there were 36 satisfactory outcomes, 1 visit resulting in a licence restriction, 23 resulting in advisory notices, 1 decision not finalised, 2 where warnings / conditions or progress reports were required, and 3 consent orders.
Table 4: Volumes of outcomes in 2021, following targeted monitoring visits to Insolvency Practitioners
Note: Visit outcomes can fall into more than one category
|-|-|-|-|
| Satisfactory report - no further action |
0 |
0 |
0 |
| Further visit to take place |
1 |
0 |
1 |
| Plans for improvement |
0 |
0 |
1 |
| Compliance review requested |
1 |
0 |
0 |
| Further investigation |
1 |
0 |
0 |
| Decision not finalised as at year end |
0 |
0 |
2 |
Figures shown in Table 4 relate to outcomes where those have been put to the RPB’s relevant Committee (where appropriate) in 2021.
3.3 Regulatory & Disciplinary Outcomes
Table 5: Sanctions during 2021
| Category |
ICAEW |
IPA |
ICAS |
CAI |
Total |
|-|-|-|-|-|-|
| Warning or caution (not published) |
0 |
1 |
0 |
0 |
1 |
| Undertaking, consent, agreement, reprimand, fine |
15 |
27 |
0 |
0 |
41 |
| Exclusion and fine |
2 |
2 |
0 |
0 |
4 |
Table 6: Alphabetical summary of regulatory and disciplinary sanctions issued in 2021
|-|-|-|-|
| ICAEW |
<IP’s name removed> |
Exclusion from membership and holding an insolvency licence for 13 years, severely reprimanded and fined £500,000 |
Throughout the period 16 August 2010 to 14 January 2011 advised and/or assisted both Silentnight and HIG in relation to a proposed acquisition of Silentnight by HIG at a time when there was a conflict of interest between the interests of Silentnight and HIG, and as a result his judgement was compromised and objectivity impaired. |
| ICAEW |
<IP’s name removed> |
Exclusion from membership and costs of £8,487.50 |
In his capacity as liquidator of a company, failed to comply with the Fundamental Principles of Professional Competence and Due Care and/or Professional Behaviour by repeatedly failing to provide information and responses to questions raised by Mr B, and/or failing to provide the relevant authority to HM Revenue & Customs, and breached paragraph 3.7 of the Insolvency Licencing Regulations as he failed to comply with Section 92A Insolvency Act 1986 read with Rule 18.7 of the Insolvency Rules (England and Wales) 2016 in that his first annual report was not filed with the Registrar of Companies within the prescribed period. |
| ICAEW |
<IP’s name removed> |
Exclusion from membership, fine of £15,000 and costs of £8,892.50 |
On 8 occasions, failed to provide the information, explanations and documents requested by letters issued in accordance with Disciplinary Bye-law 13.1, contrary to Disciplinary Bye-law 13.2. |
| IPA |
<IP’s name removed> |
Licence revocation |
Failure to address, in a timely manner, numerous deficiencies both operational and compliance related. |
| IPA |
<IP’s name removed> |
Licence revocation |
Failures to comply with conditions attached to his licence and other compliance failures. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £5,000 and costs of £3,425 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to deal with the claim of a creditor in accordance with Rule 11.3 of the Insolvency Rules 1986, and/or failing to pay the creditor a dividend or dividends properly due to him. |
| ICAEW |
<IP’s name removed> |
Severe reprimand, fine of £12,500 and costs of 5,695 |
Failure to issue and/or file with the Registrar of Companies annual progress reports within the required time limits in various insolvencies. |
| IPA |
<IP’s name removed> |
Severe reprimand and costs of £6,500 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to comply with the Insolvency Rules when he failed to submit returns, or delayed submitting returns on numerous cases and failing to comply with the principles of SIP2. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £25,402 and costs of £1,425 |
Breach of the Fundamental Principles of Objectivity and/or Professional Competence and Due care and /or Professional Behaviour when, as liquidator of various Companies she failed to identify self-interest threats as set out in the Insolvency Code of Ethics, and/or failed to introduce sufficient safeguards to reduce self-interest threats to a reasonable level, and/or directly or indirectly allowing payments of referral fees totalling £17,901.67 from UKELC to be made to or received by companies in which she had a shareholding, and /or failed to disclose to the directors and/or creditors of various liquidating companies her interest in those companies. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £5,000 and costs of 2,571.75 |
Breach of the Fundamental Principle of Professional Behaviour by mismanaging the Debtor’s affairs whereby the substantial costs incurred were disproportionate in the circumstances and ultimately caused a substantial loss to the Debtor, failing to exercise his discretion properly when determining whether a default in the IVA warranted a petition for the Debtor’s bankruptcy to be issued and failing to be transparent in his dealings and engage fully with the Debtor when proceeding with the sale of his residential property resulting in a substantial loss to the Debtor. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £7,500 |
Breach of the Fundamental Principles of Professional Competence and Due Care and Professional Behaviour when, in his role as potential liquidator/liquidator, he failed to comply with the provisions of the Money Laundering, Terrorist Financing and Transfer Funds (Information on the Payer) Regulations 2017 (MLLR17) and the Proceeds of Crime Act 2002 (POCA). |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £5,000 and costs of £2,952.50 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to take sufficient steps to verify employees’ claims before submitting the RP14A to the Redundancy Payments Service, failing to carry out independent verification of the information provided to her by the Company’s director before submitting the RP14A and failing to raise any concerns with the redundancy Payments Service as to the veracity of the employees’ claims, either before or after submitting in the RP14A. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £6,000 |
Breach of the Fundamental Principle of Professional Behaviour by failing to comply with a modification requiring that the Nominee’s fee be drawn as soon as funds permit and that dividends commence within three months of the settlement of the Nominee’s fee. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £17,500 |
Breach of the Fundamental Principle of Professional Competence and Due Care, of the Insolvency Code of Ethics, when he failed: 1. Adequately to supervise some members of his insolvency team; and/or 2. To ensure that the standards set out in that Code were applied to all members of the insolvency team as required by paragraph 2 of the Code, with the result that, without <IP’s name removed>’s knowledge or consent, staff communicating with debtors in contemplation of <IP’s name removed>’s appointment as nominee or supervisor of various IVAs: i. unreasonably included in estimates of the debtors’ income and expenditure items of expenditure which had not been discussed with or properly explained to the debtor, ii. unreasonably changed the estimated values of items of income or expenditure provided by the debtor, and/or iii. unreasonably encouraged debtors to agree with items of estimated income or expenditure proposed by members of the insolvency team. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £7,500 |
Breach of the Fundamental Principle of Professional Competence and Due Care and/or the Taxation of Chargeable Gains Act 1992 when he failed to pay when due the Capital Gains Tax arising on the sale of the Bankrupt’s assets. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £10,000 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to adequately administer numerous IVA estates and failing to take appropriate action in respect of progressing or concluding IVAs in a timely manner on a number of IVAs. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £17,000 and costs of £5,115 |
Breach of the Fundamental Principle of Professional Competence and Due Care and/or SIP3.1 by failing to ensure appropriate procedures were followed to make certain that the debtor was aware of and agreed to the proposed IVA, and incorrectly indicating in the Nominee’s Report and internal documentation that there had been discussions or a meeting with the debtor and failing to ensure that appropriate due diligence was carried out to confirm the debtor’s identity in accordance with The Money Laundering Regulations 2007. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £5,000 and costs of £950 |
Breach of the Fundamental Principle of Professional Competence and Due Care and/or SIP3.1 by failing to recognise that the debtor’s husband was jointly liable for a debt owed to the local Council and take into account the effect this would have on their joint income. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £5,000 and costs of £2,512.50 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to take sufficient steps to verify employees’ claims before submitting the RP14A to the Redundancy Payments Service, failing to carry out independent verification of the Information provided to him by the Company’s director before submitting the RP14A and failing to raise any concerns with the Redundancy Payments Service as to the veracity of the employees’ claims, either before or after submitting the RP14A. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £21,000 |
Breach of the Fundamental Principles of Professional Behaviour and/or Professional Competence and Due Care, when between March 2019 and April 2020, he deliberately disregarded, rejected, or failed to act on modifications proposed by creditors on 3,742 cases. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of 2,500 and costs of £910 |
Breach of SIP2 when he failed to list and secure books and records and/or to collect records, failed to issue an additional ‘D’ report to the Insolvency Service after the issue of a Final D2 report, in respect of the destruction of the records by the directors of the company and failed to document the reasons that no further report was made. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £14,500 |
Breach of the Fundamental Principle of professional competence and due care by failing to comply with statutory requirements to file notices with the Registrar, publish notices in the London Gazette, or submit D returns, failing to request and/or collect books and records and a completed directors’ questionnaire and also to make the Insolvency Service aware of these failures when reporting on the conduct of the relevant directors, and failing to maintain adequate records to show and explain the administration of a case. |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £6,000 |
Breach of the Fundamental Principles of Professional Competence and Due Care and Professional Behaviour when, in a supervisory capacity, he failed to comply with the provisions of the Money Laundering, Terrorist Financing and Transfer Funds (Information on the Payer) Regulations 2017 (MLLR17) and the Proceeds of Crime Act 2002 (POCA). |
| IPA |
<IP’s name removed> |
Severe reprimand and fine of £17,500 |
Breach of the Fundamental Principles of Professional Competence and Due Care and Professional Behaviour when, in her role as nominee of no less than 218 Individual Voluntary Arrangements, she wrongly treated, disregarded, rejected or failed to act on modifications proposed by creditors. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £5,000 and costs of 2,250 |
Breach of the Fundamental Principle of Competence and Due Care by failing to ingather an asset, and obtaining her discharge as Trustee when she knew, or ought to have known, that property was soon to be realised by the Accountant in Bankruptcy (AiB), or its agent, as Trustee in Bankruptcy of the bankrupt’s estranged wife, which would be of benefit to the bankrupt’s creditors. |
| IPA |
<IP’s name removed> |
Severe reprimand, fine of £3,000 and costs of £5,000 |
Improperly operated a client bank account through his firm and assisted the debtor in his business without benefit to the estate, improperly used a company of which he was a shareholder to purchase and develop property for the benefit of the debtor and himself personally, and improperly accepted the appointment as Joint Administrator of a Company owned and managed by the debtor. |
| IPA |
<IP’s name removed> |
Reprimand and undertaking to repay overdrawn amount |
Breach of the Fundamental Principle of professional competence and due care when he charged excessive time costs, which were subsequently drawn as Trustee’s remuneration. |
| ICAEW |
<IP’s name removed> |
Reprimand and costs of £6,135 |
On 2 occasions failed to provide the information, explanations and documents requested in letters issued under Disciplinary Bye-law 13. |
| ICAEW |
<IP’s name removed> |
Reprimand, fine of £1,000 and costs of £1,855 |
Failure to submit monthly progress and closure case updates in a timely manner, as required by the Insolvency Licensing Committee. |
| ICAEW |
<IP’s name removed> |
Reprimand, fine of £1,250 and costs of £2,190 |
In his capacity as Liquidator of ‘A’ Ltd, failed to adequately disclose the sale of certain assets to a connected party in the report to creditors, contrary to SIP13. |
| ICAEW |
<IP’s name removed> |
Reprimand |
Failure to comply with the requirements of SIP16 by failing to market the Company as part of a pre-packaged sale out of administration, and/or failing to disclose whether the purchaser had approached the pre-pack pool or whether a viability statement has been requested and/or failing to disclose an explanation of the rationale for the bases of the valuations obtained, and/or failure to implement and comply with a robust document approval process in respect of the SIP16 disclosure contract the Fundamental Principle of Professional Competence and Due Care. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £2,850 |
Breach of the Fundamental Principle of Professional Competence and Due Care when she failed to communicate appropriately with the debtor in relation to the debtor’s IVA contributions and surplus monies held. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £2,040 |
Breach of SIP 3.1 when she failed to convene a variation meeting in a timely manner, which caused a delay in progressing the administration of the IVA. |
| IPA |
<IP’s name removed> |
Reprimand |
Inadvertent failure to obtain approval from creditors for Category 2 Disbursements paid from diverse IVAs to four companies, which were not independent third parties within the meaning of SIP 9. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £1,542 |
Breach of the ethical principle of Professional Competence and Due Care when she failed to properly apply, and in a timely manner, the terms of the IVA relating to the debtor’s equitable interest in his property. |
| IPA |
<IP’s name removed> |
Reprimand |
Inadvertent failure to obtain approval from creditors for Category 2 Disbursements paid from diverse IVAs to four companies, which were not independent third parties within the meaning of SIP 9. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £950 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to correctly advise debtors of their suitability to enter a Debt Relief Order. |
| IPA |
<IP’s name removed> |
Reprimand and fine of £2,000 |
Breach of the Insolvency Rules 2016 and/or breach of the Fundamental Principle of Professional Competence and Due Care by drawing a fee totalling £5,000, for pre-appointment without formal approval from creditors. |
| IPA |
<IP’s name removed> |
Reprimand and fine of £2,000 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to properly apply, and in a timely manner, the terms of the IVA relating to the debtor’s equitable interest in his property. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £5,985 |
Breach of the Fundamental Principle of Professional Competence and Due Care by failing to ensure that cases, in respect of which he remained trustee, were transferred to an alternative Insolvency Practitioner following his departure from his previous firm and failing to ensure the cases were administered appropriately. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £4,000 and costs of £2,050 |
Breach of the Fundamental Principle of Professional Behaviour by requesting a fee of £250 from 69 debtors for administration costs in dealing with a payment for PPI redress received on Protected Trust Deeds that had been closed. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £1,241 |
Breach of the Fundamental Principle of Objectivity by failing to document or otherwise demonstrate that proper consideration had been made whether a conflict of interest existed with his appointments as Liquidator of a company and or Nominee and or Supervisor of another company. |
| IPA |
<IP’s name removed> and <IP’s name removed> |
Reprimand, fine of £2,000 and costs of £1,650 |
Breach of the Fundamental Principle of Professional Competence and Due Care and/or SIP3.1 by failing to notify a Credit Union Limited of the individuals’ proposals for an IVA. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £1,000 and costs of £1,050 |
Drew unauthorised remuneration totalling £1,740.06 in two debtors interlocking IVAs. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £1,000, costs of £1,200 and undertaking to rectify position of the creditors by way of payments to them totalling £1,418.66 |
Breach of the Fundamental Principle of Professional Competence and Due Care when she failed adequately to undertake closure formalities and ensure creditors received all monies due to them prior to her release from office. |
| ICAEW |
<IP’s name removed> |
Reprimand and costs of £2,290 |
Breached paragraph 3.7 of the Insolvency Licensing Regulations as he failed to comply with Rule 15.11 of the Insolvency (England & Wales) Rules 2016, by providing creditors with less than the 14 days minimum notice of a decision procedure. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £2,000 and costs of £1,875 |
Breach of SIP3.1 and/or the Fundamental Principle of Professional Competence and Due Care by failing to adequately progress IVAs. |
| IPA |
<IP’s name removed> |
Reprimand, fine of £1,500 and costs of £1,512.50 |
Breach of SIP3.1 when he failed within a reasonable time to identify and advise the debtor that a single contribution was outstanding, preventing the completion of her IVA and he failed to properly respond, and promptly, to a series of attempts to obtain information about the completion of the IVA and obtain the debtor’s completion certificate. |
| ICAEW |
<IP’s name removed> |
Regulatory penalty of £1,500 |
Breach of Regulation 3.13 of the Insolvency Licensing Regulations and Guidance Notes in that he failed to undertake a compliance review in 2020. |
| ICAEW |
<IP’s name removed> |
Regulatory penalty of £8,500 |
Failure to administer Individual Voluntary Arrangements according to their terms by failing to pay dividends on a quarterly basis as required by the proposal terms. |
| ICAEW |
<IP’s name removed> |
Regulatory penalty of £500 |
Breach of Regulation 3.13 of the Insolvency Licensing Regulations and Guidance Notes in that he failed to undertake a compliance review in 2018. |
| ICAEW |
<IP’s name removed> |
Regulatory penalty of £15,000 |
Breaches of SIPs and the Insolvency Licensing Regulations. In particular, failure to comply with English CVL legislation, breach of SIP 9, allowing an administration to lapse and CVA failings. |
| ICAEW |
<IP’s name removed> |
Regulatory penalty of £1,750 |
Breach of Statement of Insolvency Practice 3.1 and the Fundamental Principle of Professional Competence and Due Care in the Insolvency Code of Ethics. |
| ICAEW |
<IP’s name removed> |
Regulatory penalty of £1,500 |
Failure to undertake a compliance review in 2020 in accordance with regulation 3.13 of the Insolvency Licensing Regulations and Guidance Notes. |
In 2021, there were 3 exclusions from membership (2 exclusions were handed down to the same Insolvency Practitioner) and 2 licence removals (0 in 2020), 21 Severe Reprimands (21 in 2020), and 23 Reprimands (84 in 2020) made against Insolvency Practitioners.
3.4 Pre-pack Administrations
Monitoring of Statements of Insolvency Practice 16 (SIP 16) disclosure statements in pre-pack administration
Note: All SIPs can be found at www.r3.org.uk/technical-library/england-wales/sips/
SIP 16 sets out what should be included in the Insolvency Practitioner’s disclosure statement issued to all creditors of a pre-pack administration. The statement is a summary of the transaction, why it was in the best interest of creditors and best option available.
In order to be compliant with a SIP 16 statement, the Insolvency Practitioner acting as administrator must send a copy to all creditors within seven days of the pre-pack administration, providing as much detail as possible. The Practitioner must also send a copy to their RPB and include it in the statement of proposals filed at Companies House.
The RPBs have responsibility for the monitoring of SIP 16 disclosure statements.
Table 7: The monitoring of SIP 16 statements by the RPBs during 2021
| RPB |
SIP 16 Statements received |
SIP 16 statements monitored |
Compliant statements |
Non-compliant statements |
% compliant |
Regulatory action |
|-|-|-|-|-|-|-|
Note: In relation to ICAEW, it reports that 99 documents were received relating to 106 companies as some group insolvencies have been dealt with in one SIP16 statement.
Note: In relation to ICAEW, it reports that SIP16 statements have been reviewed in relation to 21 entities. Reviews of a further 24 statements are ongoing.
It should be noted that the percentage compliance figures above relate to SIP 16 statements that were monitored, not the total number of SIP 16 statements that were received.
The volume of SIP 16 statements has reduced significantly compared to the data given for 2020. This mirrors the reduction in volumes of pre-pack administrations entered into during 2021. Overall, the data show a reduction from 481 SIP 16 statements received in 2020, and a reduction in monitored statements from 197 in 2020.
Table 8: Analysis of pre-pack administrations in 2021
The table below summarises key information obtained from all of the SIP 16 statements received by the RPBs.
| Information Collected |
Number of pre-packs |
|-|-|
| Marketing activities carried out by the administrator |
105 |
| Sales involving deferred consideration |
84 |
| Viability reviews included in statements |
30 |
| Referrals to the pre-pack pool prior to 30 April 2021 [footnote 9]
|
8 |
4: Complaints - Gateway Statistics
The Complaints Gateway (‘the Gateway’) continues to be the channel for most complaints against Insolvency Practitioners. Regular meetings are held between the Insolvency Service and the RPBs to monitor the Gateway’s performance and address any issues.
The Gateway only refers cases which require consideration by the RPB. For each complaint, the Gateway considers whether it falls within the scope for referral to the RPB, based on the information provided on the complaint form along with any supporting evidence. All complainants have the right of appeal for rejected complaints. [Complaints can be rejected for varying reasons – see Table 17 below]
Table 9: Complaints received by the Gateway
|-|-|-|
Table 10: Other complaints
Note: Complaints are opened by RPBs following referrals from other committees, press coverage, or direct complaints or intelligence the Insolvency Service or other sources
| Other Complaints (2021) |
CAI |
ICAEW |
ICAS |
IPA |
|-|-|-|-|-|
| Total complaints opened |
0 |
51 |
2 |
23 |
Note: IPA - Three complaints opened on the basis of Insolvency Service intelligence were subsequently withdrawn (closed) following initial investigation
Table 11: Outcomes of complaints received by the Gateway
| Month |
Complaints received |
Referred to RPB |
Rejected |
Closed |
|-|-|-|-|-|
Note: Complaints received - 40 cases are pending, awaiting further information.
Note: Referred to RPB - In relation to data in February, this includes 94 complaints received by the gateway relating to a single administration that raised the same matter of concern. These are being managed as one lead complaint referred by the gateway to ICAEW.
Table 12: Gateway-referred complaints by subject matter
| Complaint type |
Total complaints |
% |
|-|-|-|
| Communication breakdown/failure |
77 |
18 |
| Professional competence and due care |
65 |
15 |
| Misleading advertising |
34 |
8 |
| Conflict of interest |
11 |
3 |
| Sale/dealing with assets |
5 |
1 |
| Delay in dividend payment |
3 |
1 |
| Referred by IP Regulation Section |
0 |
0 |
The highest frequency of subject matters subject to complaints was professional behaviour with 128 complaints (compared to 46 cases in 2020). This was followed by communication breakdown/failure with 77 cases (compared to 92 cases in 2020); and by professional competence and due care with 65 cases (compared to 70 cases in 2020).
Table 13: Gateway-referred complaints by insolvency procedure
| Insolvency Type |
Total complaints |
% |
|-|-|-|
| Individual Voluntary Arrangement (IVA) |
93 |
22 |
| Company Voluntary Arrangement |
4 |
1 |
In 2021, 176 complaints were received in relation to Administrations (compared to 111 in 2020); 93 complaints were received in relation to IVAs (compared to 92 complaints in 2020); and 83 in relation to liquidations (compared to 105 in 2020).
Table 14: Gateway referrals by type of complainant
| Complainant type |
Total complaints |
% |
|-|-|-|
| Debtor’s family/friend |
6 |
1 |
| Insolvency practitioner |
15 |
4 |
| Accountant in Bankruptcy |
0 |
0 |
Whilst those making complaints continue to be creditors, debtors and company directors in the main – with similar proportions of complaints received from those parties in 2021 compared to 2021, there was been an increase in creditor complaints (197 in 2021 compared to 153) albeit this is largely driven by a volume of complaints in relation to one administration, and company director complaints (41 in 2021 compared to 29 in 2020).
Table 15: Gateway Complaints referred to authorising bodies
| RPB |
Complaints referred 2020 |
Complaints referred 2021 |
% |
|-|-|-|-|
Note: Data relating to 2021 includes 94 complaints received by the gateway relating to a single administration that raised the same matter of concern. These are being managed as one lead complaint referred by the gateway to ICAEW.
Table 16: Reasons for Gateway complaint rejection
| Complaint Type |
Number rejected |
% |
|-|-|-|
| Conduct over 3 years old |
8 |
11 |
| Complaint about effect of the insolvency procedure |
45 |
65 |
| Complaint about a commercial matter |
15 |
20 |
| Directors’ conduct report confidentiality |
2 |
3 |
| Actions of a third party |
3 |
4 |
The reasons for complaints rejection have shifted slightly, with an increase in complaints being made about a commercial matter (rising from 2 last year).
Table 17: Reasons for Gateway complaint closure
| Closure reason |
Number 2020 |
Number 2021 |
|-|-|-|
| Asked to initially complain to IP |
58 |
27 |
| No response to request for information/evidence |
219 |
190 |
| No contact details to follow-up |
8 |
7 |
| Not a complaint about an IP |
29 |
25 |
| Already been through the complaints process |
4 |
10 |
| Complaint withdrawn |
11 |
13 |
| Insolvency outside the UK/not a UK IP |
1 |
0 |
| Not a complaint about an insolvency |
4 |
0 |
Table 18: Complaints made to RPBs that have remained open for over 12 months
Note: Based on all RPB complaint matters, not only those received via the complaint
| RPB |
Pre-2016 |
2016 |
2017 |
2018 |
2019 |
2020 |
Total |
|-|-|-|-|-|-|-|-|
Note: 2017 - In relation to ICAEW, the figure includes 2 complaints that were held open for monitoring purposes and are both now closed.
Note: In relation to ICAEW, one case opened in 2018 is subject to an appeal that is scheduled to be completed early in 2022. The IP’s licence has been removed and the individual has been excluded from membership of the ICAEW.
Note: In relation to ICAEW, seven complaints remain open as they are subject to review by the Reviewer of Complaints. Matters have been considered by the Investigation Committee.
Note: In relation to IPA, this includes 1 case that was subsequently closed on 1 January 2022.
Table 17 shows the volume of complaints remaining open for over 12 months and that remained open at 31st December 2021, ordered by year of when they were opened. Complaints of this nature are often highly complex. Each RPB provides this information to the Insolvency Service quarterly for progression to be tracked and, when appropriate, challenged.
In the 2020 Annual Review, ICAEW had 101 complaints remaining open over 12 months, IPA 41, ICAS 1, and CAI 1.
6. Complaints against RPBs
As oversight regulator, the Insolvency Service investigates complaints about the RPBs and the way in which they carry out their regulatory functions. A conclusion is drawn on whether (or not) the RPB has complied with its relevant procedures and the regulatory objectives.
Table 19: Complaints Received about RPBs
| Authorising Body |
Complaints received |
Upheld |
Partially upheld |
Rejected |
Ongoing |
|-|-|-|-|-|-|
Note: Ongoing - This includes cases that have subsequently been concluded, but were not concluded at 1 January 2021.
