§ Mr. Peter BottomleyTo ask the President of the Board of Trade if she will make a statement on the regulation of insolvency practitioners and of their charges. [42804]
§ Mr. Nigel GriffithsMr. Justice Ferris is chairing a working party on remuneration of office holders which is expected to report shortly. Their terms of reference are to consider and make recommendations concerning the basis324W on which the courts should fix remuneration in those relatively rare cases where the courts are involved. However, we shall give careful consideration to how any recommendations they might make may be applied in other cases.
The fees of an insolvency practitioner are subject to approval by the creditors in most forms of insolvency procedure. The authorising bodies have issued practitioners with guidance in this area, directed particularly to ensuring that creditors are provided with sufficient information to enable them to form a judgment as to whether the fees sought are reasonable in the circumstances of the case.
Under the Insolvency Act 1986, only authorised persons may act as insolvency practitioners. Authorisation may be granted either by a recognised professional body or directly by my right hon. Friend the Secretary of State. Professional bodies are recognised on the basis that they have rules to ensure that practitioners have appropriate educational qualifications and experience and that they remain fit and proper.
Practitioners have been subject to a formal programme of monitoring visits by their authorising bodies since 1994. These visits are designed to assess whether a practitioner is fit and proper and to promote compliance with statutory obligations and best practice. Monitoring has shown that the majority of practitioners now have acceptable procedures. Where failures in compliance are identified, undertakings are sought where appropriate and, in more serious cases, the authorising body will consider whether further action is required.
In November 1996, a working party was established with representatives from the insolvency professional bodies and my Department's Insolvency Service, to review the current state of regulation and to consider how it might be made more effective in the public interest. The working party issued a consultative document in December last year and is now well advanced in reviewing responses and forming its preliminary views. They expect to submit their final report later this year and we shall certainly give their findings and conclusions very careful consideration.