In June 2013, the Insolvency Service established a new gateway to provide a single point of entry for complaints to be made about Insolvency Practitioners (the Gateway). The Gateway covers 92% of Insolvency Practitioners and 98% of those who take insolvency appointments.
The Insolvency Service has recently published a report on the first year of the Gateway. Key points to note are:
- The number of complaints is up. The Gateway received 941 complaints in its first 12 months, compared to 748 and 578 complaints which had been received by the regulatory bodies in 2013 and 2012 respectively.
- 74% of the complaints received were referred by the Gateway to the IP’s regulatory body.
- 43% of the complaints referred to the regulatory bodies were transferred to investigation. The remainder were rejected at the assessment stage.
- Of those complaints being investigated, 24% of the investigations have been concluded.
- Of those concluded investigations, three formal warnings have been issued. No reprimands or fines have been imposed.
What do the complaints relate to?
Individual Voluntary Arrangements (IVAs) received the most complaints (23%) closely followed by administration (25%) and liquidation (21%).
It is clear from the report that the Insolvency Service is closely monitoring the number and type of complaints which are being received and are looking for patterns. For example, the Insolvency Service noticed a pattern of complaints about the time taken to close IVAs. This led to the Institute of Chartered Accountants in England and Wales and IPA agreeing that all complaints which allege a delay in closing an IVA in excess of six months will go straight to investigation.
Conclusions – It’s too early to tell
While it seems that the number of complaints which have been received has increased, it is interesting to note that no reprimands or fines have been imposed by the regulators, and only three warnings have been issued in respect of the cases which have been concluded. With a large number of the investigations still on-going, it will be interesting to compare the position in 12 months’ time to see whether the Gateway does anything other than increase the number of complaints which need to be processed, as well as add another layer of red tape.