In recent times, the legal profession has undergone widespread changes at the bequest of previous governments. The most draconian measures have been in relation to the expense of professional services. These include a budgeting and costs management process which is the subject of judicial approval. In essence, service provider’s fees and expenses are estimated and capped in advance of them being incurred.
The current government has chosen to extend these measures by the implementation of rules which affect all insolvency practitioners. Under these rules, insolvency practitioners are required to provide detailed costs estimates illustrating amongst other things, the work to be undertaken, the hourly rates proposed and anticipated time. These estimates once agreed will act as a cap and will only be capable of revision by agreement between the insolvency practitioners and the beneficiaries of the insolvency. The legislation comes into full force in October of this year.
The rules follow an independent review and consultation and it is envisaged that the written estimates will in many cases act as a tender document.