Insolvency practitioners, who have studied to pass the professional exams, will have learnt about insolvency legislation. This includes law and rules, Statements of Insolvency Practice, regulations, case law and the insolvency ethical code. The ultimate purpose of all this legislation is to ensure that insolvency practitioners do a good job.
A convincing argument to support the importance of compliance with the legislation is that insolvency practitioners who do a good job are likely to pay greater dividends to creditors, and this is the aim of the appointment taking insolvency practitioner.
Compliance is effectively no more (and no less) than doing a good job in the context of legislation that tells you what to do, so that you do not have to guess. It is still necessary for insolvency practitioners to use their knowledge and experience in the context of the legislation, however, to make good decisions. This is the purpose of the professional exams, to make sure that insolvency practitioners are well trained to use their knowledge and experience. The process of qualification and regulation to achieve a good standard of professional work is well established and it functions very well.
Nowhere in the insolvency legislation does it say that compliance with legislation, or that a good job is done, merely by buying standard letter packs or checklists and following someone else’s standard opinion of how an insolvency appointment should be administered. The work of an insolvency practitioner is complex and as an experienced insolvency compliance consultant I have seen too many mistakes when bought in standard letters and checklists are relied on for compliance.
Before someone instructs an insolvency practitioner, or any professional person, it is a good idea to carry out due diligence as far as possible to make sure that the professional person is good at his or her job. Checking an insolvency practitioner’s reliance on someone else’s standard letters might be a useful part of this.
Please email Caroline on firstname.lastname@example.org if you would like to find out more about RMCSC and insolvency compliance.
Caroline Clark is the director of RMCSC, an established insolvency compliance consultancy that provides high quality advice that is tailored to the client’s needs. Caroline is an insolvency practitioner with about 30 years’ insolvency experience including senior national regulatory roles. Caroline graduated with an MBA in 1999 and qualified as a mediator in 2015 and is a member of Mensa. This additional expertise is of practical use for the clients of RMCSC.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.