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directors of a company if he has already submitted such a report as administrator of the same company.

7.To remove the requirement that the Insolvency Services Account be held with the Bank of England.

8.To remove the court power to order that a person owing moneys to a company in liquidation pay those moneys into an account, in the liquidator’s name, at the Bank of England.

At the time of writing, the Insolvency Service is yet to act on the above proposals but it does appear likely that modernising and streamlining the communications systems that operate within liquidation will ensure a lowering of overall transaction costs. The consultation process will no doubt prove useful in seeking to ensure that such efficiencies are not secured at the cost of diminutions in accessibility, transparency and accountability.

Expertise

A liquidator must be a qualified IP210 and the general characteristics of IPs have been discussed in chapter 5 above. The issue of particular concern here is whether the winding-up process, as presently set up, is consistent with the exercise of an appropriate level of expertise. In asking this question, it is not necessary to assess the potential of the liquidator as an agent of possible rescue. His or her role is more focused than that of, say, an administrator and centres on gathering in the assets and distributing them. It is in the gathering process that there is a particularly strong role for expertise. At this stage of operations, the liquidator has both to defend the body of corporate assets and seek to increase it. The former task is evident in liquidator dealings with those who claim that property in the possession of a company does not form part of the estate: because, for instance, it is asserted that the owner has retained title. Socio-legal studies of practice reveal, in this area, a high level of IP expertise and dominance.211 Claimant suppliers to companies are often out of their depth and IPs tend to be in possession of the goods, to know the supply needs and to be both legally competent and familiar with the legal game being played. They are sophisticated repeat players who will

210Insolvency Act 1986 s. 388.

211See S. Wheeler, ‘Capital Fractionalised: The Role of Insolvency Practitioners in Asset Distribution’ in M. Cain and C. B. Harrington (eds.), Lawyers in a Post Modern World: Translation and Transgression (Open University Press, Buckingham, 1994).

568 gathering and distributing the assets

use devices such as delay and bluff to protect the assets of the estate.212 Liquidators, moreover, have an incentive to deploy their expertise to the full: their fees have to be paid out of the assets that are realised and the less that is removed from the company by, say, successful uses of the retention of title device the more remains for fee-paying purposes. Questions may arise as to the fairness of such arrangements but lack of liquidator expertise is not the primary issue.

The challenge to the expertise of the liquidator is perhaps more severe when he or she attempts not to retain assets but to secure these, for example, by using the avoidance powers given to liquidators to challenge transactions that prejudice creditors. What is clear from the empirical research, however, is that the self-policing of insolvency professionals can operate in a manner that upholds ethical or professional standards, as where IPs use their powers in order to remove from office at the creditors’ meeting a liquidator of whose conduct they did not approve.213

Running counter to such expert upholding of standards, however, is the tendency of IPs to use their professional expertise at creditors’ meetings not to further transparency in liquidation processes but to engage in self-serving activities of a collective or individual nature. Wheeler argues that the creditors’ meeting is often used by IPs as a public forum to parade their standards of practice; to compete for the work involved in the liquidation (by ‘stealing’ the liquidation from the provisional liquidator through use of rhetoric to gain creditor support); and to sideline creditors and exclude trade creditors from a process amounting to an ‘exclusionary discourse’.214 Such an account, of course, emphasises the danger of evaluating insolvency processes by using a benchmark of expertise without reference to objectives: liquidation may be a process that lends itself to certain misdirections of expertise.

Accountability

In both voluntary and compulsory liquidations the liquidator is obliged to convene a meeting of creditors to consider his removal from office if he is requested to do so by more than 25 per cent in value of the creditors, and if he fails to do so the creditors may apply to the court to order such a

212Ibid., p. 90. See also ch. 3 above and ch. 15 below.

213S. Wheeler, ‘Empty Rhetoric and Empty Promises: The Creditors’ Meeting’ (1994) 21

Journal of Law and Society 350, 360.

214Ibid., pp. 367–9.

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meeting.215 At such a meeting, a simple majority of those present and voting may remove the liquidator.216

Such may be the formal position but, on the ground, the accountability of a liquidator – particularly to the creditors’ meeting – may operate quite differently. Legal accountability may be described as ‘empty rhetoric’.217 As was seen in the last section, IP expertise and repeat playing may produce dominance over the creditors’ meeting rather than accountability so that such meetings are seen by IPs and liquidators not so much as holdings to account as opportunities for pursuing or defending business.

Does the Human Rights Act 1998 (HRA) introduce the prospect of greater legal accountability for liquidators?218 The HRA applies to the decision-making procedures of all public bodies and it is unlawful under section 6 for a public authority to act in a way that is incompatible with a Convention right. A liquidator is liable to be considered as a public authority under section 6(3) as he or she undertakes a public function, for the benefit of society as a whole. (An administrator of a company is also likely to be seen as a ‘public authority’.)219

The European Court of Human Rights (ECHR) has held that Article 6 of the Human Rights Convention is satisfied where there is a proper right of appeal to a court and the determining of rights is properly reviewable by the court after a fair hearing.220 In the case of liquidator activities relating to a company being wound up by the court, the Insolvency Act 1986 provides for court control in sections 167(3) and 168(5). The courts, however, have indicated that they will only interfere with a liquidator’s decision on grounds of reasonableness221 and that they would think carefully before replacing an

215 Insolvency Rules 1986 rr. 4.114-CVL and 4.115. 216 IA 1986 ss. 171, 172.

217Wheeler, ‘Empty Rhetoric and Empty Promises’.

218See generally M. Simmons and T. Smith, ‘The Human Rights Act 1998: The Practical

Impact on Insolvency ’ (20 00) 16 IL& P 167 ; C. G earty, ‘ Ins olvency … an Rights?’ [2000] Ins. Law 68; W. Trower, ‘Human Rights: Article 6 – The Reality and the

Myth’ [2001] Ins. Law. 48; Trower, ‘Bringing Human Rights Home’; N. Pike, ‘The Human Rights Act 1998 and its Impact on Insolvency Practitioners’ [2001] Ins. Law. 25.

219The position is less clear in relation to administrative receivers, supervisors of voluntary arrangements and office holders when not undertaking ‘public functions’: see Simmons and Smith, ‘Human Rights Act 1998’, p. 170.

220See I. F. Fletcher, ‘Juggling with Norms: The Conflict between Collective and Individual Rights under Insolvency Law’ in R. Cranston (ed.), Making Commercial Law (Clarendon Press, Oxford, 1997) pp. 411–14.

221See Re Edennote Ltd, Tottenham Hotspur plc v. Ryman [1996] BCC 718; Leon v. York-O- Matic Ltd [1966] 1 WLR 1450; Mitchell v. Buckingham International plc [1998] 2 BCLC 369.