Insolvency: Fees and Charges

Business, Enterprise and Regulatory Reform written question – answered on 16th January 2008.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Secretary of State for Business, Enterprise and Regulatory Reform if he will investigate instances of insolvency practitioners charging more than £500 per hour.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

The Insolvency Rules 1986 determine how the remuneration of an office holder (liquidator/trustee etc.) is to be fixed and provide that such remuneration shall be fixed by reference to the time properly given to the administration, or as a percentage of the assets which are realised and distributed. In most insolvency cases it is for the liquidation or creditors' committee to determine the basis for fixing the remuneration or, in the absence of such a committee, the creditors decide the matter. The Rules also make provision for the court to review the amount of remuneration charged.

As the amount of remuneration is subject to review by the court the Secretary of State has no powers to investigate the amount of remuneration charged.

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