Sunday, 18 February 2007

'IP-lite' providers for IVAs.

IVA co.uk provide an online forum on IVA matters and it was interesting to read (belatedly) the IVA News blog posted on their site about proposals from the Institute of Chartered Accountants in England and Wales (thankfully known as the ICAEW) for a new qualification dubbed 'IP-lite'.

We posted our initial comments on the site but they're worth repeating here because it sounds as if the ICAEW may be trying to lighten a sector that is already top heavy with lightweights.

The IVA News blog quotes reports that a new insolvency qualification is being prepared that will distinguish professionals undertaking IVAs from those doing other types of insolvency work and could see IVA specialists - with a lesser qualification - being hived off from the insolvency profession.

The report says that a controversial aspect of the plan includes the possibility of revoking the full licenses of qualified insolvency practitioners focused on IVA work and giving them the lesser IVA qualification instead.

Surely the proposal to remove the licences of the IPs who specialise in personal insolvency - particularly IVAs - would make a nonsense of both the Insolvency Act and case law relating to IVAs ?

IPs are officers of the court and they are, at least technically, only supervising IVAs on behalf of the courts. The way the law works at present, an IP supervising an IVA is protected from civil legal action so long as he acts within the insolvency laws and the terms of the voluntary arrangement.

That's why complaints about the actions of supervisors have to be made on application to the County Court under s.263 of the Insolvency Act and the courts are supposed to deal with with these applications as insolvency matters.

If you remove the IPs licence then you probably also remove their statutory protection and statutory regulation and, as a result, supervisors in IVAs will be exposed to civil legal action whilst carrying out their duties.

Perhaps we should welcome that - it would certainly make legal action against IPs a lot easier - but I suspect that the proposals for an 'IP-lite' qualification only arise because the ICAEW are seriously underestimating the potential complexity of personal insolvencies.

If the ICAEW are simply proposing that 'IVA advisers' should be better qualified - if not formally qualified - no one would disagree with that but the creation of a two-tier insolvency profession as a solution to the problems surrounding IVAs sounds more like an act of expediency rather than a serious solution based on clear understanding of the problems.

Perhaps there is a hidden agenda here. Introduction of an IP-lite qualification and removal of the licence would also require a change in regulation and the ICAEW would no longer be responsible for any of their members who might be dealing with 'lighter' (less serious?) personal insolvency business rather than heavyweight corporate insolvencies.

With the upsurge in bad publicity about the mis-selling of IVAs, it seems worth asking if this proposal is really the ICAEW's way of trying to wash its hands of the whole business by shifting the regulation of personal insolvency practitioners elsewhere ? If so, perhaps that should also be welcomed - so long as it is a step towards setting up a new independent regulator.

1 comment:

Anonymous said...

"Surely the proposal to remove the licences of the IPs who specialise in personal insolvency - particularly IVAs - would make a nonsense of both the Insolvency Act and case law relating to IVAs ?"
- i agree how can this change in legislation be conducive to personal insolvency and IVA?!

 
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