reporting powers might be exercised by such a person. The case for such an arrangement is considered in the next section.

Accountability

The accountability of IPs is provided for, in the main, by the selfregulatory regimes outlined above.118 Attention should be paid to those concerns that are traditionally expressed in relation to self-regulatory mechanisms.119 These include the tendency of such mechanisms to exclude ‘outsiders’ from policyand rule-making processes; the lack of accountability of self-regulators to the public rather than to members;120 the tendency of self-regulators to favour members’ interests rather than those of the public; their generally poor record of rule enforcement; their anti-competitive effects (for example, through the imposition of excessive restrictions on access); their low levels of procedural transparency, information disclosure and reason giving; and the failure of voluntary schemes of self-regulation to control those persons who are both most likely to cause mischief and least likely to participate in such schemes.121

Criticisms of IP regulation echo the above points in some respects, with advocates of independent regulation stressing the protectionism and lack of objectivity of self-regulation.122

118As noted, IPs are held accountable in some respects by statute (see Insolvency Act 1986 s. 212, Sch. B1, para. 75 (misfeasance)), statutory obligations to file periodic returns at the Companies Registry, and the Insolvency Practitioners Regulations 2005. For a review of IP regulation by the IP regulators see IRWP Review. (This section of the chapter builds on Finch, ‘Controlling the Insolvency Professionals’ and ‘Insolvency Practitioners’.)

119See generally R. Baldwin and M. Cave, Understanding Regulation (Oxford University Press, Oxford, 1999) ch. 10; J. Black, ‘Constitutionalising Self-Regulation’ (1996) 59 MLR 24; Blach, ‘Decentring Regulation’ (2001) 54 Current Legal Problems 103–47; C. Graham, ‘Self-regulation’ in G. Richardson and H. Genn (eds.), Administrative Law and Government Action (Clarendon Press, Oxford, 1994); C. Parker, The Open Corporation: Effective Self-Regulation and Democracy (Cambridge University Press, Cambridge, 2002); D. Sinclair, ‘Self-regulation Versus Command and Control’ (1997) 20 Law & Policy 529; V. Finch, ‘Corporate Governance and Cadbury: Self-regulation and Alternatives’ [1994] JBL 51.

120See Justice, Insolvency Law, p. 27.

121On the ‘consensual paradox’ and the tendency of voluntary mechanisms to regulate those least in need of regulating while failing to control those who most need to be restrained, see R. Baldwin, ‘Health and Safety at Work: Consensus and Self-regulation’ in R. Baldwin and C. McCrudden (eds.), Regulation and Public Law (Weidenfeld & Nicolson, London, 1987) p. 153.

122See H. Anderson, ‘The Case for a Profession’, Financial Times, 17 February 1998.

200 the context of corporate insolvency law

Some lay involvement is found, however, in the IPs’ complaints procedure. Complaints against IPs are generally handled by the RPBs and the process is regulatory rather than remedial – it is concerned with maintaining professional standards as opposed to providing redress.123 Typically cases are investigated by an assessor from the RPB, progressed to an investigating committee or panel or, if serious, to a disciplinary panel. An appeal from a disciplinary panel lies to an appeal tribunal and it is these tribunals that have considerable lay input. Sanctions include withdrawals of licence, suspensions, reprimands, fines, costs awards and exclusion from membership.124 The RPBs report annually to the IS with figures on complaints handling but some commentators have argued that there should be greater and more easily accessible information on what classes of complaint are being (or have been) investigated by the RPBs – with one source disclosing rulings and actions taken.125

The quality of RPB monitoring and enforcement has, in the past, been brought into serious question. In 1993 the IS conducted an inspection of around fifty-five IPs and found that half of these were failing seriously to meet their statutory requirements. Ten per cent of those inspected generated very serious disciplinary problems which led to the withdrawal of licences and criminal prosecutions.126 Pressure from the DTI (as it then was) led, as a result, to the establishment of a Joint Insolvency Monitoring Unit (JIMU) by the RPBs and to a regime of regular, random inspections. This regime of regular inspections still continues despite the abolition of JIMU at the end of 2004, but is now conducted in-house by the RPBs. The head of IP regulation at the IS noted in 2005 that these new monitoring arrangements can involve differences in approach127 but that overall compliance with principles of good regulation and enforcement

123See generally A. Walters and M. Seneviratne, Complaints Handling in the Insolvency Practitioner Profession: A Report for the Insolvency Practices Council (IPC, London, 2008) and, on purposes, see p. 52.

124Ibid.

125Rumney and Smith, ‘Sorting Out the Bad Apples’, argue that the absence of such an information source is a ‘glaring omission’ in current arrangements (p. 37).

126A. Jack, ‘Insolvency Regime to be Tightened’, Financial Times, 22 January 1993. To conclude that the above problems stemmed from self-regulation might, however, be unfounded. The (then) DTI, in the same period, found many serious regulatory breaches among the 150 IPs that it regulated directly and disciplinary action (including deregulation) also resulted.

127Chapman, ‘Insolvency Service’s View of Regulation’, p. 25, stating that, for example, the ICAEW has moved to a ‘holistic approach’ while the IPA has adopted an approach which ‘focuses on qualitative outcomes’.