In recent years, regulators from across the professional spectrum have invested heavily in devising new procedures for handling complaints. Often, these new procedures seek to better serve the consumer by being more straightforward and more efficient. Insolvency regulators are the latest to grasp this nettle.

Regulating IPs

Any individual who acts as a liquidator, trustee in bankruptcy, administrative receiver, administrator or supervisor under a voluntary arrangement, must be personally authorised to act as an insolvency practitioner. The authorisation process was introduced by the Insolvency Act 1986.

Currently, authorisation may be made by the Secretary of State for Business directly (through the Insolvency Service’s Insolvency Practitioner Unit), or by one of seven Recognised Professional Bodies (RPBs). Each authorising body is monitored by the Insolvency Service’s Insolvency Practitioner Unit and each is required to have proper procedures in place for receiving and investigating complaints against its members.

In 2012, there were 1,715 authorised IPs in Great Britain, of which 1,329 were appointment takers.

Current complaints system

Before making a complaint under the current system, it is first necessary to establish to which authorised body the IP belongs, for it is to this body that any complaint must be directed. Thereafter, the procedures for investigating and responding to any complaint will be those operated by the relevant authorised body.

In 2011, 517 complaints were made against IPs (reduced from 531 in 2010 and 618 in 2009). Of these, and by category, the largest numbers related to liquidation (164), bankruptcies (125) and administrations (124). Figures for 2012 are yet to be published.

The new complaints process

The reforms, which are expected to take effect before the end of June 2013, will include the following:

  • A complaints gateway 
  • Published common sanctions guidance 
  • Dedicated web page for publishing sanctions 
  • Common decision makers for appeals

The new gateway will be operated by the Insolvency Service and is expected to receive all complaints against IPs. A decision will then be made by the Insolvency Service as to whether or not further investigation is warranted. If it is, the complaint will be referred to the relevant authorised body, which will ultimately determine the complaint in accordance with new common sanctions guidance.

The consequences

While the effect of these changes can only be properly evaluated in the goodness of time, they should greatly improve access to the complaints process for consumers, by simplifying the initial steps to be taken. Provided that the new regime is properly resourced, it should also deliver increased efficiency, both in terms of the cost born by the profession of responding to complaints and in terms of the time-frame needed for doing so. Further, the common sanctions guidance, combined with the introduction of a dedicated web page for publishing sanctions, should improve consistency and transparency.