suffer from the poor services of ‘maverick’ turnaround advisers who are not quality controlled.

It might, however, be no easy matter to install a mandatory regime. The problem of boundary definition is acute since, as seen above, TPs provide a wide range of services – from management consultancy for healthy companies right through to rescue advice for companies that are going through formal insolvency processes. In the case of some of these services, it might be hard to justify mandatory regulation since market forces may control matters such as quality of service and price quite acceptably. The boundary problem means, moreover, that a mandatory regime might bring a number of dangers. It might, for instance, prove over-inclusive so that persons offering any advice to a company might be potentially covered by the mandatory rule. Any uncertainties, indeed, on the extent of a mandatory regime might discourage consultants from offering advisory work and this might be counter to the interests of companies generally. These difficulties militate in favour of a nonmandatory approach to self-regulation.251 It can be pointed out, moreover, that those practitioners who elect not to join the self-regulatory system for TPs may still be regulated by other bodies and by certain statutory regimes. Thus, TPs who are accountants or lawyers will be controlled by the self-regulators of those professions and, if a TP is involved in financial advice, he or she may be covered by the financial services regulatory requirements.

To conclude on the TP regime’s assurance of expertise, it can be said that there has been a progression to the point where the foundations of a professional self-regulatory system have been laid. Further work needs to done, though, to match the position obtaining with IPs and boundary issues mean that there are liable to remain difficulties with the provision of turnaround services by persons who are not members of such selfregulatory systems. These are non-trivial difficulties since, as noted, the consequences of poor service provision may be severe.

Conclusions

In this chapter we have seen that there may be a case for reforming the regulatory regime for IPs and that new regulatory challenges have also

251It is, of course, conceivable that a government might legislate to make the IFT regime mandatory in the wake of a turnaround disaster involving a ‘maverick’ turnaround adviser. The author is grateful to Les Otty for this point.

238 the context of corporate insolvency law

arisen with the arrival of TPs on the scene. Regarding IPs there seems, as noted, to be no strong case for replacing private practitioners with public officials as the main implementers of insolvency procedures. There may be a case, though, for tightening the mechanisms used to regulate IPs and a number of potentially valuable reforms have been canvassed above, including proposals to rethink the duties that IPs owe to the array of interests involved in insolvency processes and to subject the current IP regulatory regime to more stringently independent oversight.

The emergence of the turnaround professional, we have seen, raises fresh issues of efficiency, accountability, fairness and expertise. It can be argued, albeit in the absence of cut-and-dried statistics, that turnaround specialists are making a contribution to effective rescue-seeking. The market, at least, seems convinced that the rescue outputs of turnaround specialists are increasingly to be valued. The accountability of TPs appears to be modest but there is a rationale for this in so far as the market appears to value their independence as a factor that facilitates rescue.

As for procedural fairness within turnaround, informal rescue procedures do not provide all creditors with the same protections that are provided by statutory insolvency processes. This is not, however, a situation that is necessarily to be deplored. A distinction has to be drawn at some stage between informal and formal procedures and, in any event, the law offers a general set of protections for those who have provided credit to the troubled company. It cannot be guaranteed that turnaround professionals will always consult the whole array of interested parties when carrying out reconstruction negotiations. A number of factors, however, may encourage turnaround professionals generally to favour processes that are accessible, transparent and procedurally fair. One such factor is the incentive that turnaround specialists have to protect their reputations as even-handed and effective negotiators of corporate solutions.

On matters of expertise within the TP regime, it can be said, on the one hand, that these professionals are able to deploy a new set of specialist skills and services in seeking to turn the affairs of troubled companies around. On the other hand, these specialists are not all as comprehensively regulated as insolvency practitioners nor are they all subject to the sorts of rigorous quality and entry control regimes that the Cork Committee considered were appropriate for IPs. There are, moreover, serious problems of service boundary definition that would make it difficult to advocate that all turnaround professionals should be subject to a mandatory scheme of regulation.

In summary, there seems no reason for observers of TPs in action to experience fears analogous to those expressed by Cork when that Committee was looking at unlicensed insolvency practitioners. There is, however, more work to be done to devise measures of success for turnaround professionals and to develop the regulation of these specialists. The movement of rescue work further into the pre-insolvency period has shifted a number of familiar debates and raised a host of new challenges. Those challenges will remain to be faced for some time to come.