Comparable RPB punishments for Insolvency Practitioners?
One of the most interesting outcomes or qualities of the Insolvency Service (IS)’s recent Annual Review of Insolvency Practitioner Regulation (2009) is that the document shines a light on the comparative punishment of Insolvency Practitioners (IPs) across the various Recognised Professional Bodies (RPBs). Here follows a sample of IPs who have been punished by their respective RPBs over the course of 2008. All of the following information comes directly from the IS report:
Institute of Chartered Accountants in England and Wales - ICAEW
- Geoffrey Robbins of Leicester - severe reprimand, a fine of £5,000 and costs of £3,680 for failing to pay sufficient regard to the Guide to Professional Ethics when accepting an appointment in an IVA and failing to advise a successor supervisor of incorrect statements made by the debtor in his proposal to creditors.
- Gordon Craig of Skelmersdale, West Lancashire - reprimanded, fined £5,000 and ordered to pay costs of £7,750 for failing to carry out sufficient investigations when nominee of a company in respect of a Company Voluntary Arrangement (CVA) to satisfy himself that the proposal had a reasonable prospect of being approved and implemented.
- Ordered an insolvency practitioner to pay a regulatory penalty of £4,500 for a breach of ICAEW’s licensing regulations for failing to carry out an insolvency compliance review in 2006.
- Robert David Hewitt of West Byfleet, Surrey - ordered to pay a regulatory penalty of £3,000 for drawing remuneration without the requisite authority.
- ICAEW identified that an insolvency practitioner had failed to comply with SIPs or to keep fully up to date with their Continuing Professional Development. The practitioner was required to undertake a compliance review using an external reviewer and their licence restricted until an improvement could be demonstrated.
Insolvency Practitioners Association – IPA
- Mr Jeremy C Frost of Croydon, Surrey - breach of SIP3 (Voluntary arrangements) and the Ethical Guide regarding connected IVAs. Mr Frost was severely reprimanded, fined a sum of £10,000 and also ordered to pay a contribution of £1,000 to the IPA’s costs.
- Mr Timothy Calverley of Bradford, Yorkshire - consent order in relation to his conduct as supervisor of a CVA and the issue of annual reports to creditors which were misleading and failed to comply with the requirements of SIP3 (Voluntary arrangements) and SIP9 (Remuneration of office-holders). Mr Calverley was reprimanded, fined a sum of £5,000 and was also ordered to pay a contribution of £500 towards the IPA’s costs.
- Mr Barry Peter Knights of Salisbury, Wiltshire - withdrew the licence on the ground that he had ceased to be a fit and proper person to act as an insolvency practitioner.
- Mr David Andrew Field of Matlock, Derbyshire - IPA withdrew the licence of on the ground that he had ceased to be a fit and proper person to act as an insolvency practitioner.
- Mr Richard E Floyd of Guildford, Surrey - IPA restricted the licence terms. The restriction places a limit on the number of insolvency appointments Mr Floyd can hold and will remain in place until such time as a series of improvements to Mr Floyd’s practice are implemented.
- Mr Alan W Adie of Aberdeen, Scotland - IPA restricted the licence, limiting the number of appointments Mr Adie can hold and prohibited him from taking any new appointments from 1st January 2009. The restriction will remain in place until such time as a series of actions and improvements are implemented by Mr Adie.
- IPA ordered two insolvency practitioners working in the same practice to provide undertakings to comply with SIP3 (Voluntary arrangements) and SIP9 (Remuneration of office-holders) following a targeted inspection which identified compliance issues with both SIPs and also identified delays in collecting company records. A further inspection visit will be undertaken to assess the practitioners’ performance in these areas.
- IPA agreed an undertaking with an insolvency practitioner following a monitoring inspection which identified compliance issues with SIP3 (Voluntary Arrangements), the reporting requirements of SIP9 (Remuneration of office-holders) and with the adequacy of the practitioner’s contemporaneous records of the acts, decision, strategies and advice of the practitioner.
- The practitioner entered into an undertaking to comply with these three areas of concern and these will be assessed by a further targeted visit.
Institute of Chartered Accountants in Scotland - ICAS
- Graham Cameron Tough of Glasgow - severely reprimanded and ordered to pay a penalty of £35,000 and costs of £40,000. Mr Tough was found guilty of professional misconduct in that he failed in his responsibilities as a licensed insolvency practitioner in his handling of five separate appointments as a trustee under trust deeds for creditors and in particular he entered into improper financial arrangements related to referrals from a firm of debt counsellors.
Association of Certified Chartered Accountants - ACCA
- Ordered an insolvency practitioner not to accept any new insolvency appointments and ordered the practitioner to close or transfer remaining cases to another insolvency practitioner following identification of serious deficiencies in the conduct of their work.
- ACCA ordered that an insolvency practitioner should have a sample of their cases reviewed by another insolvency practitioner or a training company and receive a further monitoring visit in 2009.
Solicitors Regulation Authority - SRA (Law Society)
- restricted the licence of an insolvency practitioner by imposing a condition on the nature and type of appointments the practitioner was able to take. The practitioner had taken over a significant number of cases from a colleague who had retired and the LS had concerns over the quantity and scope of the practitioner’s case load.
The fines and the other treatment noted above only relate to one year, i.e. 2008. The sample is rather small. Any meaningful comparisons between the RPBs are, therefore, severely limited. What the information does show or indicate though is that RPBs are fulfilling their investigatory and disciplining functions in relation to RPBs. General disciplinary information from each RPB does already exist, e.g. ICAEW, but this insolvency specific publication is useful for consumers. This is of course good in terms of public confidence in the insolvency system. For a thorough discussion of IPs discipline and complaints procedures see Professor Adrian Walters' recent work for the Insolvency Practices Council (IPC - one and two).
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...