Insolvency practitioners
Licensed insolvency practitioners
Introduction
The Insolvency Act 1986 requires anyone acting as a receiver, liquidator, administrator, supervisor or trustee of a company or of an individual to be a licensed insolvency practitioner.
The Law Society is one of several professional bodies that can license (or "authorise") its members as insolvency practitioners; the Council of the Law Society has delegated this regulatory function to the SRA. The recognised professional bodies are members of the Joint Insolvency Committee (JIC).
The licence allows solicitors to
- act as supervisors of voluntary arrangements
- act as administrators
- act as administrative receivers or liquidators for a limited company
- act as receivers
- act as trustees in bankruptcy for individuals
- administer insolvent estates of the deceased
Licensed solicitors are also able to offer advice on all legal aspects of insolvency, bankruptcy and related matters.
When you see the SRA's licensed insolvency practitioner logo, you'll know that the solicitor's skills, knowledge and experience have been rigorously and independently assessed.
How can solicitors become licensed as insolvency practitioners?
Solicitors who wish to be licensed under the Insolvency Act 1986 should apply for authorisation to the SRA (see rule 17 of the Solicitors' Code of Conduct).
For details of the criteria for and terms and conditions of authorisation, see the SRA's Procedures for authorisation to act as an insolvency practitioner (PDF 63K).
Before applying to the SRA for authorisation, solicitors must have passed the Joint Insolvency Examination. In addition, applicants must
- have been admitted for at least three years and hold a current practising certificate
- have had significant involvement in insolvency work over the past three years, accumulating a minimum of 600 chargeable hours
- submit to the SRA an application for authorisation to act as an insolvency practitioner (PDF 51K) covering all aspects of their insolvency practice and fitness
Joint Insolvency Examination
Solicitors who wish to be licensed as an insolvency practitioner must first pass the Joint Insolvency Examination (JIE).
The examination is set, marked and administered by the Joint Insolvency Examination Board (JIEB), which consists of representatives appointed by the recognised professional bodies (RPBs) authorised by the Secretary of State for Trade and Industry. The authorised bodies are known as Recognised Professional Bodies (RPBs).
The Council of the Law Society has delegated its RPB functions to the SRA.
The JIE consists of three papers; each paper is three hours long and includes four compulsory questions. The papers cover the following areas:
- Liquidations – Past paper 2007 (PDF 52K)
- Receiverships, Administration and Company Voluntary Arrangements – Past paper 2007 (PDF 42K)
- Personal Insolvency – Past paper 2007 (PDF 45K)
The JIEB has produce a detailed report on the English JIE for 2007: Examiners' report and marking plan – December 2007 exam (England) (PDF 206K). You may wish to use the report to prepare for the 2008 examinations.
Examination dates – 2008
- Administration, company voluntary arrangements and receiverships – 3 November 2008
- Liquidations – 4 November 2008
- Personal insolvency – 5 November 2008
The JIEB has agreed to add 30 minutes of extra time to each paper, and it recommends that this time be used to read the examination paper carefully, for preparatory drafting and for final checking.
Examination application form and syllabus – 2008
- Joint Insolvency Examination: Notes to candidates and syllabus for the examination (2008) (PDF 75K)
- Joint Insolvency Examination: Application form (2008) (DOC 88K)
If you are a solicitor of England and Wales and plan to sit the Joint Insolvency Exam, please submit your completed application form and fee (payable to "JIEB") by 12 September 2008.
Send your form and fee to
Education and Training Unit
Solicitors Regulation Authority
Ipsley Court
Berrington Close
Redditch
B98 0TD
Information for solicitors
Solicitors must comply with practice requirements to remain licensed as insolvency practitioners:
- Professional conduct rules
- Statements of insolvency practice
- Insolvency guidance papers
- Annual fees
- Period of authorisation
- Information for licensed practitioners – re-authorisation
- Complaints
Useful links
The Insolvency Service operates under a statutory framework—mainly the Insolvency Acts 1986 and 2000, the Company Directors Disqualifications Act 1986 and the Employment Rights Act 1996. It deals with insolvency matters in England and Wales and some limited insolvency matters in Scotland.
The Insolvency Service provides informative and topical advice and guidance in its regular publication Dear Insolvency Practitioner.
The Association of Business Recovery Professionals is a not-for-profit organisation known by the brand name R3—rescue, recovery, and renewal. It is a professional association for business recovery, corporate reconstruction, insolvency and turnaround specialists in the United Kingdom.
BPP Professional Education offers a course to prepare candidates for the Joint Insolvency Examination.
The Insolvency Practices Council (IPC) is a public-interest body that scrutinises and reports on ethical and professional standards in the insolvency profession.
The Joint Insolvency Committee represents the recognised professional bodies that regulate insolvency practitioners.
SRA logos for licensed insolvency practitioners
The SRA operates a dedicated website for accreditation scheme members, including licensed insolvency practitioners. The site offers secure access to the SRA's licensed insolvency practitioner logo.
Practice requirements
Professional conduct rules
Rule 17 of the Solicitors' Code of Conduct deals with insolvency practice.
Statements of insolvency practice (SIPs)
SIPs are issued to insolvency practitioners with a view to maintaining standards by setting out required practice and harmonising practitioners' approach to particular aspects of insolvency.
The purpose of SIPs is to outline basic principles and essential procedures with which insolvency practitioners are required to comply. Departure from the standards established in SIPs is a matter that may be taken into account in the event of disciplinary or regulatory action.
The recognised professional bodies, acting through the Joint Insolvency Committee, have agreed that, for reasons of consistency, this statement of purpose should be retrospectively applied to all SIPs; solicitor insolvency practitioners should read all SIPs accordingly.
The following SIPs can now be downloaded below: 1-4, 7-15.
Download SIP 1
SIP 1 – An administrative receiver's responsibility for the company's records (PDF 50K)
Download SIP 2
SIP 2 – A liquidator's investigation into the affairs of an insolvent company (PDF 70K)
Download SIP 3
SIP 3 – Voluntary arrangements company (PDF 103K)
Download SIP 4
SIP 4 – Disqualification of directors (PDF 44K)
Download SIP 7
SIP 7 – Preparation of insolvency office holders' receipts and payments accounts (PDF 50K)
Download SIP 8
Download SIP 9
To download the main text of SIP 9, follow the first link below; to download the appendices, follow subsequent links.
SIP 9 – Remuneration of insolvency office holders (PDF 84K)
- Appendix A – Rules relating to the remuneration office holders (PDF 99K)
- Appendix B – Official receiver's scale and Schedule 6 to the Insolvency Rules 1986 (PDF 47K)
- Appendix C – Text of creditors' guidance notes
- Appendix D – Suggested format for production of information (PDF 70K)
Download SIP 10
SIP 10 – Proxy forms (PDF 18K)
Download SIP 11
SIP 11 – The handling of funds in formal insolvency appointments (PDF 57K)
Download SIP 12
SIP 12 – Records of meetings in formal insolvency proceedings (PDF 37K)
Download SIP 13
SIP 13 – Acquisition of assets of insolvent companies by directors (PDF 43K)
Download SIP 14
SIP 14 – A receiver's responsibility to preferential creditors (PDF 45K)
Download SIP 15
To download the main text of SIP 15, follow the first link below; to download the annexes, follow subsequent links.
- Annex A – Guidance for members of creditors' committees in administrations (PDF 52K)
- Annex B – Guidance for members of creditors' committees in administrative receiverships (PDF 52K)
- Annex C – Guidance for members of creditors' committees in bankruptcy (PDF 65K)
- Annex D – Guidance for members of liquidation committees (PDF 84K)
- Annex E – Guidance for members of committees in voluntary arrangements (PDF 32K)
Insolvency guidance papers
The first aim of the Joint Insolvency Committee (JIC) as stated in its mission statement is as follows:
To consider, maintain, improve, develop and promote insolvency standards and guidance of regulatory, ethical or "best practice" nature by means of debate and agreement within the Committee.
Much of the JIC's work has concentrated on statements of insolvency practice (SIPs); these have developed into statements that lay down the "required" practice for insolvency practitioners; SIPs, therefore, contain mandatory standards.
The JIC has identified additional areas in which insolvency practitioners could benefit from guidance—but for which it would be inappropriate to create mandatory standards or methods of work.
Individual authorising bodies raised concerns about areas in which insolvency practitioners could improve their approach to appointments or to practice administration.
In response, the JIC has developed "insolvency guidance papers" (four papers, as of February 2006); it recommends that each authorising body adopt them. The SRA has adopted the papers listed below:
- Bankruptcy – family homes (PDF 31K)
- Control of cases (PDF 29K)
- Succession planning (PDF 33K)
- Systems for control of accounting and other business records (PDF 33K)
Insolvency guidance papers describe suggested practice; and practitioners may find alternative—equally effective—approaches to the issues the papers address. Insolvency guidance papers in no way replace SIPs, which outline required practice.
The JIC continues to consider areas of practice for inclusion in future guidance papers.
Annual fees
Licensed insolvency practitioners must pay a licence fee upon application.
They also pay an annual fee, usually in December, to cover the cost of mandatory monitoring and levies from the Insolvency Practices Council, the Department for Business, Enterprise and Regulatory Reform (BERR) and the Department of Enterprise, Trade and Investment of Northern Ireland.
The fee is recalculated annually, and will vary from year to year.
Under the Insolvency Practitioners and Insolvency Services Account (Fees) (Amendment) Order 2005, the annual fee payable to BERR by recognised professional bodies per person authorised is £200.
Period of authorisation
Authorisation as an insolvency practitioner is effective for a maximum of three years and is subject to re-authorisation.
Re-authorisation
If you are authorised and you think your license is about to expire, you don't need to do anything. We automatically sends you the forms and all of the details you need at least two months before your authorisation expires.
To ensure the forms reach you promptly, please notify us by email of any changes to your practising details.
Complaints
Solicitor insolvency practitioners are subject to the normal rules and principles that apply to solicitors.
In its role as a recognised professional body, the Law Society is required to make a report to the Insolvency Service on the investigation and outcome of any complaint made against a solicitor who is a licensed insolvency practitioner, among other matters. The Law Society has delegated this function to the SRA.
Insolvency practitioners regularly submit returns regarding appointments held; they are also monitored by a contracted agency. If concerns arise from an unsatisfactory monitoring report, the SRA will investigate the issues and, if necessary, take action.