New R3 resource aims to shatter insolvency fees myths
Insolvency and restructuring trade body R3 has published new research which aims to address a range of misconceptions about insolvency fees.
R3’s paper, ‘Insolvency fees and the cost of regulation – the detail behind the headlines’, explains how insolvency fees are charged, paid and regulated, and provides an overview of the role of the regulatory framework and the scope of work involved in insolvency cases.
R3 Immediate Past President Duncan Swift says: “Insolvency fees are one of the most misunderstood aspects of the profession’s work. People don’t realise the difference between the costs that are reported and what is actually paid at the end of the day, the wide variance in fees depending on the size of cases, and how the complexity of cases contributes to costs.
“These are the types of things we’re trying to highlight with this paper, which we hope will improve people’s understanding of how and why the profession charges the fees it does, dispel the myths around insolvency fees and help people realise the level of work and the results that are delivered by members of the profession for the fees they earn.”
Swift continues: “One key aspect of the report is the fact that insolvency practitioners will frequently not be paid in full for the work they have carried out, due to the nature of insolvency. The headline grabbing amount in the reports as the total cost of the work carried out frequently bears little resemblance to the fees which are paid at the end of a case.
“At a time when insolvency numbers are likely to rise and the skills of members of the profession are likely to be under increased demand from distressed businesses, we want to ensure there’s as much information out there as possible about the work the profession does and how it supports people, businesses, and the economy.”