A Word to the Wise
Robin MacGregor gave his perspective of the current insolvency landscape to the ICAS Insolvency and Restructuring Conference this week, and almost managed to avoid coming over as a grumpy old man.
These are difficult days for Insolvency Practitioners, and with numbers at the event significantly down on recent years you may be forgiven for thinking quite a number have better things to do. Robin's comments did nothing to dissuade those considering early retirement. The yes / no questions he addressed were:
Do you believe there is a market (for personal insolvency in Scotland)
Do you have the proper skills to do the required job properly
Do you believe that one legal system for the UK personal insolvency market is desireable
Do you believe the Insolvency Practitioner is adequately rewarded by the market
Do you believe that the reward is adequate compensation for the inherent risks that are faced.
The market for personal insolvency work in Scotland is skewed by the presence of the Accountant in Bankrupty, and despite the AiB's protestations to the contrary it is impossible to believe that the playing field is level. So the IP is competing with a public sector - a competition that will only ever have one winner.
It was interesting that one of the other speakers, Mike Norris of Max Recovery Ltd, talked about the creditors duty to ascertain if their borrower was particularly vulnerable. If they decided that a debtor had, say, mental health issues – was it enough for them to tell the IP of that? And a later speaker is Nigel Crompton – a campaigner for awareness of mental health issues among debtors. So is the IP now required to be a social worker, and what training does he or she have in those skills?
One way to undermine the empire built in Scotland by the Accountant in Bankruptcy would be to have one insolvency system for the whole of the UK. The elephant in the room, of course would be whether the harmonisations would lead to the Scottish processes being introduced to England and Wales, rather than vice versa. Be careful what you wish for.
In answer to Robin's last two questions, Insolvency Practitioners are voting with their feet. The general perception seems to be that risks are increasing and pressure on fees means rewards are significantly less. So creditors need to appreciate that if they want a Scottish personal insolvency system that is professional and fit for purpose then they have to pay for it. Of course, they are only interested in money and data (about money).
“Some people have told me that I'm grumpy; it's not something that I'm aware of. It's not like I walk around poking children in the eye... not very small ones, anyway.” (Dylan Moran)