On the 12 November 2009, the OFT launched a market study into corporate insolvency. The investigation was prompted by concerns raised with the Government and the Insolvency Service, and also following a recent World Bank report which showed that the costs of closing a business in the UK are higher than in other countries.
The OFT’s study will look in particular at the structure of the market and the appointment process for insolvency practitioners. It will also identify any features in the market which could result in harm, such as higher fees or lower recovery rates for certain groups of creditors. This appears to support the findings in the report by R3, the trade body for insolvency practitioners, which highlighted the cost of insolvency as a relative weakness of the UK's regime. The OFT stated that the study will enable it to ensure that insolvency firms and practitioners are competing freely and that the market is working well for the end consumer.
132/09 - 12 November 2009