The British Property Federation has welcomed a government consultation which will revise insolvency practitioners’ fees.
The consultation proposes a simplification of the fee structure and passing more control to creditors in order to address difficulties quantifying the value of work done by insolvency practitioners.
Each year insolvency practitioners realise approximately £5bn of assets from corporate insolvency processes, and in doing so, charge about £1bn in fees, distributing some £4bn to creditors.
In 2010 the OFT found that in a little more than a third of insolvency cases where unsecured creditors receive a payout, fees were estimated to be 9% higher in like-for-like cases than where secured creditors ‘control’ an insolvency practitioner’s fees.
BPF chief executive, Liz Peace, said: “Giving creditors greater control over how fees are charged marks an important step in revolutionising the fee structure and we welcome the proposals being put forward.”
The consultation also intends to strengthen regulation of the sector.
Bridget.O’Connell@estatesgazette.com
