Research and analysis

Confidence in the Regime 2021 to 2022 - insolvency practitioners and debtors

Updated 14 April 2023

Applies to England, Scotland and Wales

1. Executive Summary

1.1 Background and methodology

In September 2021, The Insolvency Service published its five-year (2021-26) strategic plan setting out the future direction of the Agency [The Insolvency Service. The Insolvency Service Strategy 2021 to 2026. Available at: https://www.gov.uk/government/publications/the-insolvency-service-strategy-2021-to-2026/the-insolvency-service-strategy-2021-to-2026]. The Insolvency Service’s vision is for it to be at the centre of a fair, efficient and effective insolvency system that is a global leader in insolvency solutions for citizens and for businesses, underpinned and supported by a profession that is recognised for the highest professional, technical and ethical standards when carrying out its work. Key to understanding whether this vision is realised is the extent to which stakeholders have confidence in both the insolvency and enforcement regimes.

To that end, the Insolvency Service commissioned IFF Research to undertake qualitative research to provide a baseline on stakeholder’s confidence in the insolvency and enforcement regimes.

In total, 50 semi-structured interviews were conducted with debtors and Insolvency Practitioners (IPs) to develop that baseline assessment and determine if the two regimes are perceived to be:

• Fair;
• Efficient;
• Effective; and
• World Leading.

Given the importance of awareness and understanding as pre-conditions to assess the themes that may underpin a confidence measure, as outlined in the Insolvency Service’s previous quantitative stakeholder confidence survey last run in 2014/15, we also sought to develop a baseline on these measures as part of the research.

In addition, stakeholders were asked to give a high-level quantitative confidence score for both the insolvency and enforcement regimes at the beginning and at the end of their interviews, in order to prompt initial areas to focus upon and then reflect on after considering the regime’s fairness, efficiency, effectiveness and whether it was world leading.

1.2 Overall findings

High-level confidence in the regime

Debtors were largely confident in both regimes, with the exception of Creditors’ Petition debtors who held a more negative view of the regimes. Debtors also had considerably higher confidence in the insolvency regime than the enforcement regime, mostly due to a lack of knowledge of what constitutes the enforcement regime. Their confidence scores were highly linked to their satisfaction with the overall outcome of their case.

IPs views and confidence in the regime were more mixed. However, they broadly followed the same pattern as debtors and had substantially lower confidence in the enforcement regime when compared with the insolvency regime.

Awareness and understanding

Debtors had a limited understanding of the insolvency regime before they started their insolvency procedure, and whilst understanding increased during the journey, debtor’s understanding was still limited.

A key role was played by third sector organisations and IPs in developing debtors’ understanding of insolvency procedures and helping them to understand their options and make an informed decision.

Debtors were largely unaware of the overall enforcement regime and the legislative framework that it constitutes, but understood that enforcement actions would result from hiding assets in their insolvency cases.

Fair

Debtors thought the regime was largely fair to all stakeholders. In contrast, IPs believed that the insolvency regime currently skews slightly towards debtors, but also that the ‘scales are tipped’ frequently.

IPs believed that the regime has the tools for effective enforcement including detection and tackling wrongdoing, but that the cost to The Insolvency Service of pursuing enforcement actions is prohibitive and therefore there is perceived to be limited appetite from The Insolvency Service for enforcement action.

Debtors largely felt stakeholders were acting according to high standards in their cases. IPs felt that the majority of their peers act ethically, but highlighted a small minority who they perceived to operate with lower ethical and professional standards and reduced investigation of cases.

Efficient

Debtors largely did not understand the options available to them at the beginning of the process, and whilst both debtors and IPs felt that although information is out there, debtors did not always know how to navigate it.

The timescales for insolvency procedures varied considerably. Debtors with quick turnarounds were happy with the timescales, however those where cases had been going for many years were less satisfied.

The costs of insolvency procedures were thought by debtors to be significant, especially for someone in financial distress, but at the same time they felt that the benefits still outweighed the costs.

In most cases debtors did not go to court and had no major issues with the out of court procedures. IPs and Creditors’ Petition debtors who did go to court appreciated the benefits of the move to online court and out of court procedures, driven by the stay-at-home order and other lockdown restrictions brought in as a result of the COVID-19 pandemic, which saved on fees or costs (travel and finding time off work).

Debtors made limited use of digital tools but where they did, found them efficient. IPs had a different experience, highlighting that certain tools and services provided by the Insolvency Service were outdated or had limited functionality, which were time consuming and caused significant frustration.

IPs believed the current regime has limited efficacy in achieving its goal to maximise returns to creditors and that it is shaped in a way that means there is very limited recovery for creditors.

IPs agree that the regimes play an effective role in promoting economic stability and growth, enabling viable companies to survive and providing an avenue for debtors to improve their financial situation.

Effective

Debtors experienced significant financial relief from going through insolvency procedures, and whilst the process did not remove all financial obstacles, debtors’ financial situations improved, and they broadly made a fresh start. The impact (and effectiveness of this) underpins their confidence in the regime.

In addition to financial relief, debtors experienced several improvements to their wider health and family wellbeing.

Debtors and IPs agreed that there was still a lot of stigma around insolvency and this plays a role in preventing debtors from seeking help earlier. IPs believed that this extended to corporate insolvencies as well, with directors delaying coming to them until the company is non-viable, in situations where this could be avoided.

For the most part, debtors and IPs felt that the process was transparent, except for Creditors’ Petition debtors.

In terms of balancing the needs of different stakeholders, IPs highlighted that whilst debtors do have protection, creditors often do not get a lot of money back from insolvencies, especially smaller creditors. IPs felt the regimes were more effective in balancing the needs of the different stakeholders in corporate insolvency, such as balancing the needs of employers and employees in corporate insolvency cases, in comparison with personal insolvency.

IPs felt the enforcement regime was ineffective in prevention of financial wrongdoing but questioned whether it is possible for this to be improved at all. They referred to their perceptions of The Insolvency Service’s limited remit and highlighted the ease for individuals to continue with risky behaviour.

World leading

IPs were very mixed about whether the regimes were innovative or forward thinking, believing that the regime was typically responsive to existing conditions in the market rather than demonstrating forward thinking. The COVID-19 relief measures were seen on one hand to be an effective approach to the global pandemic, but also to have further highlighted aspects of the regime that needed modernisation.

IPs thought that their industry was consulted well by The Insolvency Service, whilst discussing a potential skew towards consultation with the larger IPs and trade associations at the expense of the smaller firms.

Whilst IPs’ ability to make comparisons were limited, the IPs that did have a comparison to make, compared the UK’s system very favourably with the rest of the world.

IPs were uncertain about the regime’s ability to effectively police cross-border insolvency and believed that leaving the European Union will play a big role in determining their effectiveness.

1.3 Conclusions

Debtors and IPs largely felt that debtors, and the wider public, could benefit from more information about the process and additional training for lenders to help signpost debtors in severe financial distress.

Debtors had very limited communication with The Insolvency Service and there was an appetite for more frequent communications and other improvements in this area.

IPs focused on improving the effectiveness of Official Receivers and reducing the administrative burden of compliance for small businesses. Of greatest importance for IPs was a significantly greater resource allocation and appetite from The Insolvency Service for enforcement actions.

2. Background and methodology

2.1 Background and objectives

Over the last few years, The Insolvency Service has implemented significant changes to the way its services are delivered, transforming its infrastructure, streamlining its estate, and reorganising delivery units, to improve efficiency and effectiveness.

In September 2021, The Insolvency Service published its five-year (2021-26) strategic plan with the clear aims to develop the organisation further, considering the challenges faced by businesses and people on the back of the COVID-19 pandemic. The strategy is built on the following vision for the service: ‘to be at the centre of a fair, efficient and effective insolvency system that is a global leader in insolvency solutions for citizens and for businesses, underpinned and supported by a profession that is recognised for the highest professional, technical, and ethical standards when carrying out its work.’

To ensure the delivery of the strategy is on track, a number of KPIs have been developed. One key strategic KPI is a measure to track stakeholders’ confidence in the insolvency and enforcement regimes. This KPI is important for monitoring progress across The Insolvency Services aims to:

• Strengthen it’s system regulation and improve the insolvency framework;
• Strengthen the impact of it’s investigation and enforcement activities; and
• Sharpen it’s operating focus in Official Receiver Service.

Whilst there is no universal definition of what public confidence in government is, it is noted that confidence may be seen to arise from capacity to function properly. Themes and questions have been built around this, with reference to best practice principles around Insolvency regimes such as from the European Bank for reconstruction and development [European Bank for Reconstruction and Development. EBRD Core Principles of an Effective Insolvency System], the Organization for Economic Cooperation and Development (OECD) [Organisation for Economic Co-operation and Development. OECD Economics Department Working Papers: Design of insolvency regimes across countries (2018). Available at: https://doi.org/10.1787/d44dc56f-en] [Organisation for Economic Co-operation and Development. OECD Economics Department Working Papers: Insolvency Regimes and Productivity Growth: A framework for analysis], the International Monetary Fund (IMF) [IMF. IMF Working Paper: The Use of Data in Assessing and Designing Insolvency Systems (2019). Available at : The Use of Data in Assessing and Designing Insolvency Systems (imf.org)] [IMF. Orderly and Effective Insolvency Procedures (1999). Available at: https://www.imf.org/external/pubs/ft/orderly/index.htm] and the World bank [World Bank. Working Group for the Treatment of the Insolvency of Natural Persons. (2014). Available at: https://documents1.worldbank.org/curated/en/120771468153857674/pdf/ACS68180WP0P120Box0382094B00PUBLIC0.pdf] [World Bank. Principles for Effective Insolvency and Creditor or Debtor Regimes (Revised, 2015). Available at: https://www.worldbank.org/en/topic/financialsector/brief/the-world-bank-principles-for-effective-insolvency-and-creditor-rights].

With the need to measure confidence in the regime to monitor delivery of its five-year strategy, the Insolvency Service commissioned IFF Research to undertake qualitative research to provide a baseline on stakeholder’s confidence in the insolvency and enforcement regimes. Regime in this context is defined as the set of rules or legislative framework that regulates personal and corporate insolvency, for which The Insolvency Service has policy responsibility. The Insolvency Service will look to replicate this research with the same and different stakeholders in subsequent years.

The stakeholders that provide a baseline for this research are:

• Insolvency Practitioners (IPs): Individuals licensed and authorised to act in an insolvency appointment in relation to an insolvent individual, partnership, or company.
• Debtors: Individuals who are insolvent. This can be through:
  • A Debt Relief Order (DRO): A form of debt relief available to those who have a low income, low assets and less than £30,000 of debt. There is no distribution to creditors, and discharge from debts takes place 12 months after the DRO is granted. A change in eligibility criteria was introduced from 29th June 2021 in which the upper limit of debt increased from £20,000 to £30,000. In addition, the threshold on the value of assets that a debtor can hold and be eligible to enter into a DRO increased from £1,000 to £2,000; the value of a single motor vehicle that can be disregarded from the total value of assets increased from £1,000 to £2,000; and the level of surplus income received by the debtor before payments should be made to creditors increased from £50 to £75 per month;
  • An Individual Voluntary Arrangement (IVA): A voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by licensed Insolvency Practitioners;
  • Bankruptcy:
• Debtors’ application: Where the individual is unable to pay their debts, and applies online to make themselves bankrupt; and
• Creditors’ petitions: Brought through a creditor petition, where someone owes more than £5,000, the person or company to whom it is owed can apply to make the individual bankrupt.

To complement the vision around the current strategy, The Insolvency Service believed it would be suitable for a confidence measure to capture themes around whether the regimes are perceived to be:

• Fair;
• Efficient;
• Effective; and
• World Leading.

As awareness and understanding are pre-conditions to the themes above, a measure of awareness and understanding was used to set a baseline, and to assess the themes underpinning confidence. Further to this a high-level quantitative measure of confidence was used at the beginning and end of interviews for both the insolvency and enforcement regimes.

2.2 Methodology

An overview of the methodology has been provided in the section below and is further expanded upon in the Annex.

Research design

The Insolvency Service has measured confidence in its enforcement regime before, for example through a quantitative survey conducted in 2014/15 [The Insolvency Service. Stakeholder Confidence Research 2014/2015 (2015). Available at: [https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/483694/Exec_Summary_-Stakeholder_Confidence_report.pdf](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/483694/Exec_Summary-_Stakeholder_Confidence_report.pdf)]. However, qualitative research [The Insolvency Service. Stakeholder confidence research. (2016). Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/547745/Stakeholder_Executive_Summary.pdf] called into question the ability to capture the complexities of stakeholder confidence in one aggregated KPI measure. The same observation has been made in regard to public confidence in government, with no universal definition of what constitutes confidence in government, and a risk in relating a single measure to capture improving or declining services [Cowell, R. Downe, J. Martin, S. and Chen, A. Public Confidence and Public Services: It Matters What You Measure, Policy & Politics 40:1 pp.123-143 (2012). Available at: https://www.researchgate.net/publication/272274575]. Other issues with capturing data this way include:

• Improvement in government services and satisfaction does not always correlate to an increase in public confidence;
• As services improve, so can expectations from the public;
• Perceptions rather than reality can inform public confidence;
• The measure could remain relatively stable over time and would be hard to measure with the margin of error;
• Difficulties in achieving a robust sample to track trends over time

Due to these difficulties and potential inaccuracies of a quantitative approach, a qualitative approach, utilising semi-structured interviews, was considered to be more useful in delivering useful and actionable insight to The Insolvency Service. The qualitative approach enables the research to gather more detailed and nuanced reasons around confidence and more detailed insight into what improvements could be made.

Sampling

The target population was debtors (DROs, debtors application debtors, creditor petition debtors and IVA debtors) and IPs. The sample frame for the interviews was provided by The Insolvency Service, in line with its personal information charter [The Insolvency Service. Personal information charter. Available at: Personal information charter - The Insolvency Service - GOV.UK (www.gov.uk)], and focussed on debtors that were subject to personal insolvency proceedings in the last year (April 2021- December 2021) and Insolvency Practitioners registered during November 2021.

Recruitment

The participant recruitment quotas (as seen in Table 1) were set to follow a purposive sampling approach to identify a variation of cases in relation to the topic of interest. For IPs, sampling included membership of the recognised professional bodies and whether they were working as a sole trader or as part of a medium or larger firm, as determined by the number of employees currently employed by their organisation. Small firms were defined those with 1-49 employees, medium firms those with 50-249 employees and large firms as those with over 250 employees.

The recognised professional bodies for IPs are the Insolvency Practitioners Association (IPA), the Institute of Chartered Accountants England and Wales (ICAEW), Institute of Chartered Accountants Scotland (ICAS) and Chartered Accountants Ireland (CAI). As the Insolvency Service caries out enforcement work in England, Wales and Scotland (but not Ireland) it was decided to include IPA, ICAEW and ICAS as memberships targeted for the project.

Table 1. Achieved hard and soft quotas

Quota category	Number of interviews achieved	Achieved quotas
Insolvency Practitioners	10	X4 with IPs working as sole traders/small firms X6 with IPs working in medium/larger firms X4 with IPs who are members of ICAEWX5 with IPs who are members of IPAX1 with IPs who are members of ICAS
Debtor - DRO	10	Mix in terms of level of debt Mix in age and gender 4 who took DRO prior to changes in eligibility June 2021 (increase to £30k limit)
Debtor – debtors’ Application	10	Mix in terms of level of debt Mix in age and gender
Debtor – Creditors’ Petition	10	Mix in terms of level of debt Mix in terms of demographics (age, gender, ethnicity)
Debtor - IVA	10	Mix in terms of level of debt Mix in age and gender
Total		50

Fieldwork

Fieldwork was carried out between Monday 17th January 2022 and Friday 24th February 2022. IFF Research conducted 60-minute semi-structured telephone and online interviews with 50 stakeholders across the five stakeholder categories.

Interviews were carried out via telephones or online (Zoom/Microsoft Teams) and recorded via automated recording systems or Zoom/Teams recordings. Recordings were used to manually complete an analysis framework and a selection of interviews were fully transcribed, anonymised and provided to The Insolvency Service.

Analysis

Analysis was undertaken using a framework analysis approach [Srivastava, A. & Thomson, S. B. (2009).Framework Analysis: A Qualitative Methodology for Applied Research Note Policy Research. JOAAG, Vol. 4. No. 2]. Framework analysis is a useful approach to research that has specific questions, a limited time frame and a pre-designed sample. The approach consisted of the following stages:

• Familiarisation of the data

The team familiarised themselves with every completed interview. This involved listening to the full interview / reviewing the internal transcript and noting down any initial themes emerging.

• Developing a thematic framework to analyse the data

After the first interviews had been completed and the team had reviewed the transcripts we developed a thematic framework, using both the emerging themes and key areas of interest from the topic guide. The framework was based in Microsoft Excel, with each column representing an emerging theme or key area of insight required from the guide (for example overall confidence in the regime).

Notes from the original interview and the recording were used to identify the key themes coming out of discussions.

All pre-determined headings that were included in the final framework related to the initial research objectives and allowed comparisons to be made across different groups of debtors and IPs.

• Indexing and charting

Once the framework was in place interviewers indexed data from the interviews, by identifying sections of the data that corresponded to particular themes. Specific pieces of indexed data were then entered into the Excel framework, so that they could be arranged under the identified themes. Utilising the Excel framework ensured that the data could still clearly be linked to the case from which it came.

Data entered into the analysis framework was quality assured through iterative review by members of the Research team, to ensure that responses were entered accurately and to follow up on any points for clarification. 

An interim analysis session was conducted mid-way through fieldwork to discuss emerging findings and the themes identified by interviewers. The Insolvency Service team attended the meeting to provide further Quality Assurance. However, IFF led the discussion to ensure input from The Insolvency Service wouldn’t have unintended influence on the analysis.

• Interpretation and mapping: Producing a blueprint

At the end of fieldwork, following further data familiarisation, a final analysis session was conducted to compare initial themes with anything novel that had come out of the later interviews. Any inconsistencies between interviewers were then discussed and a consensus of key narratives was reached to form a blueprint for the report. A schematic diagram, in the form of the Excel framework, was used to guide interpretation and analysis of the data, enabling key characteristics of the research to be pulled out into this report.

There was a lack of novel themes coming out of later interviews, thus suggesting we may have reached saturation in analysing the data. Nevertheless, the lack of ethnic diversity of our sample [The initial research design plan was to achieve a mix in the sample recruitment in terms of ethnicity across all debtor types but were unable to meet that mix across DRO, Debtors’ Application and IVA debtors. As ethnicity data for debtors is not collected by The Insolvency Service, we are unable to determine the representativeness of this sample for that demographic] has restricted our findings in that data saturation may not have been achieved, meaning we may be missing key themes from this group.

Uncertainty and Assumptions

As this is qualitative research, the purpose of the research is to provide an in-depth understanding and reflect the variety of experiences of debtors and IPs. It is not intended to be statistically representative, and therefore findings should not be generalised to the population of debtors and IPs.

Due to the relatively high number of interviews to analyse, IFF chose to summarise the experiences of stakeholders through common and more prevalent themes and insights when reporting the findings. In doing so, some of the nuance observed between participants may be lost. This should be considered when interpreting the findings.

3. Confidence in the Regime

Stakeholders were presented with a question designed to gather a first indicator (on a scale of 1 to 10) of their confidence in both the insolvency and enforcement regimes, to develop a high-level response to further explore in the interview.

3.1 Debtor confidence in the insolvency and enforcement regimes

All debtor categories reported substantial ranges in their levels of overall confidence in the regime(s). Excluding Creditors’ Petitions, debtors generally reported high overall levels of confidence in the regime(s).

Table 2. Highest and lowest confidence scores for debtor stakeholder groups

Stakeholder category	Insolvency regime	Insolvency regime	Enforcement regime	Enforcement regime
	Lowest Score	Highest score	Lowest Score	Highest score
Debtor - DRO	6	10	7	10
Debtor – Debtors’ Application	7	10	1	9
Debtor – Creditors’ Petition	1	8	1	8
Debtor - IVA	1	10	5	10

The comparatively lower score for the enforcement regime was down to their more limited understanding of the role and framework of the enforcement regime, as outlined further in Section 4. Debtors were also unable to distinguish between the two regimes, often finding it difficult to separate their view of the regime from the outcome of their case itself or of The Insolvency Service, further reinforcing the complexities of capturing stakeholder confidence in one aggregated KPI measure.

When explaining why they had confidence, debtors felt that the enforcement regime provided options for them that can have significant benefit and change to their circumstances, providing financial and physical relief at a critical juncture in their lives. Debtors highlighted being able to see an immediate improvement to their lives because of the insolvency process.

“I feel a lot happier knowing that things are being handled.”

Debtor - IVA

“I feel that the system is fit for purpose and is a good lifeline for debtors in trouble. It’s not perfect but it mostly does what it should do.”

Debtor - DRO

“It’s got to be very high (score) because I was under so much stress, and then all of a sudden to have that stress wiped out was brilliant.”

Debtor - DRO

Where debtors had low or medium confidence, giving a score of 5 out of 10 and below, this revolved around a lack of understanding by debtors of the process and the regime. It was also related to the outcome of their case such as unforeseen or misunderstood consequences, in terms of restrictions and long-term implications of the procedures and being forced into insolvency procedures in the case of a creditors petition.

3.2 IP confidence in the insolvency and enforcement regimes

IPs provided a mixed response, with scores ranging between 3 and 8 out of 10 for both the insolvency and enforcement regimes. They typically had lower overall confidence in both the insolvency and enforcement regimes than debtors. In answering, they reflected both on specific cases they have been involved in and the legislative framework of the regime as whole.

Table 3. Highest and lowest confidence scores for Insolvency Practitioners

Stakeholder category	Insolvency regime	Insolvency regime	Enforcement regime	Enforcement regime
	Lowest Score	Highest score	Lowest Score	Highest score
IPs	3	8	3	8

IPs that gave the regimes a high overall score believed that, despite some areas for improvement, the regime is one of the best in the world and that the current framework of the regimes and objectives of The Insolvency Service, are in line with the needs of stakeholders.

“Feels that it generally works well, and legislation is fit for purpose. Some areas to improve but all around a good system.”

Insolvency Practitioner

“It has incorporated best practice across various territories, so it is a balanced and considered approach.”

Insolvency Practitioner

“We have one of the best regimes compared to a lot of other countries. It’s very robust and heavily regulated.”

Insolvency Practitioner

IPs reporting lower confidence scores in the insolvency regime discussed the role, accountability and effectiveness of The Official Receiver’s Office, the potential role of The Insolvency Service as the sole regulator of IPs, and an increased administrative burden from additional compliance requirements.

“The legal framework works, but I have low confidence because of the role of The Official Receiver’s office, and I am unhappy that The Insolvency Service may become the regulator”

Insolvency Practitioner

“The Official Receiver’s Office is not accountable to creditors or to anybody”

Insolvency Practitioner

Where IPs discussed a lower level of confidence in the enforcement regime, IPs perceived there to be a limited appetite for enforcement action from The Insolvency Service. In their view this was due in part to the high costs of pursuing enforcement cases. The effectiveness of the existing framework was felt to be limited, in particular with corporate insolvency and the disqualification of directors.

“There was one [case] where we had to beg them [The Insolvency Service] to come out and look at the files, which they did in the end but didn’t seem particularly interested. They seem interested in low hanging fruit but not the ones where it might take a bit more effort.”

Insolvency Practitioner

4. Awareness and understanding of the Regime

4.1 Awareness and understanding of the Insolvency Regime

Debtors have a very limited knowledge of the regime and its legal framework beyond the insolvency procedures they went through and were unfamiliar with the procedure before they began the process, and at times, during the process. They were also unclear on the implications of their specific insolvency procedure on the returns received by their creditors.

“Whilst some debtors may be aware, they may not properly understand the process or implications of each procedure.”

Insolvency Practitioner

For debtors third parties played a major role. Typically, third sector organisations and IPs were important in developing their understanding of the process and the regime itself, as well as the options of insolvency procedures available to them and the appropriateness of each of these options.

“The people I spoke to were very good and understanding with me. I’ve just followed the directions I was given by them.”

Debtor- DRO

“The IP was very good at walking me through the process and I felt that I understood my options clearly at every stage.”

Debtor- IVA

Whilst debtors had a limited initial understanding, once they began the process of insolvency, they understood the insolvency procedure they were going through, even if they had limited understanding of some of the long-term implications. However, this did not lead to an improved understanding of the overall regime.

“The rules are laid out quite well. There’s not hundreds and hundreds of them.”

Debtor- Debtors’ Application

IPs believed this also extended to corporate insolvency and the level of understanding directors had of the insolvency process.

“If directors have been involved it is an experience. They know how it works, but quite a lot of directors have no idea of their obligations and rights and a lot of my work is telling them that once a company is insolvent their duties are to the creditors not to shareholders. There is quite a lot of education.”

Insolvency Practitioner

IPs and debtors felt that there was a lot of information on the regime and insolvency procedures available and readily accessible for individuals. Whilst it was easy to find information on the insolvency regime, there was also a significant number of third parties providing information linked to the solicitation of insolvency services for debtors.

“I only know what I get told … I wouldn’t say I am confused but I obviously don’t know it from cover to cover. I just know what I have learnt and what I have watched on TV.”

Debtor- IVA

Debtors did understand why the insolvency regime was important for helping those in financial distress and helping viable companies to survive, and why the specific insolvency procedures they went through were necessary in their own cases. However, both debtors with high confidence and low confidence reported a limited awareness of the potential options available to them in their personal insolvency, having been advised about the most appropriate route by third sector organisations or IPs.

“I looked at every option possible and at my age the level of debt was so much that I would never have been out of it.”

Debtor- Debtors’ Application

IPs believed that the level of understanding debtors had of the insolvency regime, the procedures available for them and the procedure most relevant to them varied considerably across debtors for personal insolvency and for directors in the case of corporate insolvency. IPs believed that they play a key role in developing that knowledge amongst debtors.

“People understand that businesses go bust but they don’t understand the detail of insolvency, how it impacts upon them and what the options are and how things work.”

Insolvency Practitioner

Additionally, IPs felt that because debtors and directors have a limited understanding of the insolvency regime, in turn they were unaware of the potential benefits of insolvency procedures, especially regarding corporate insolvency.

“There is also a perception, that getting an IP involved is the end and the grim reaper, whereas a lot of what they do will look at business risk and see where they can save parts of the business. Directors don’t always know what the consequences are, or could be, if they don’t do things correctly and they don’t always know what the benefits could be of doing it.”

Insolvency Practitioner

4.2 Awareness and understanding of the Enforcement Regime

Debtors themselves and IPs highlighted that debtors’ understanding of the enforcement regime, if it existed at all, was substantially limited for both personal and corporate insolvency. Debtors were unable to distinguish the framework of the enforcement regime from the insolvency regime and the only elements they had some clarity on were the consequences should they attempt to hide assets during their insolvency procedure.

“You have to be honest with your receiver…I don’t think you can get away with too much these days.”

Debtor- Creditors’ Petition

IPs believed that, similar to the enforcement regime, directors’ awareness of their obligations and liabilities with regard to corporate insolvency varies considerably but is typically low.

“Directors only have a slight awareness prior to them seeking professional advice – they often have little knowledge of personal liability, they always require this advice…always maintained directors should sit an exam to understand duties and responsibilities.”

Insolvency Practitioner

5. Perceptions of Fairness

5.1 Overall views on fairness – Debtors

Debtors with a medium or high level of confidence in the regime felt that the regime treats debtors fairly and equally across the board, with this view founded mainly upon their own experiences. However, debtors did feel this fairness has led to a regime where there is little distinction between those who are persistent and deliberate debtors and those individuals who have got into debt with a single creditor and will eventually repay.

“The rules aren’t dictated by whatever situation each person is in…one set of rules for all.”

Debtor - Debtors’ Application

Debtors felt unable to say how fair the regime was on creditors given their limited oversight of how much creditors received as part of their insolvency procedures.

“People make mistakes and once you are made bankrupt it is difficult to come back up again.”

Debtor - Debtors’ Application

Those with lower confidence in the regime including those that were forced into bankruptcy did view the regime as very unfair, linked to the circumstances of their case and the fact that the Creditors’ Petition, as an insolvency procedure, forces debtors through a process they didn’t choose to enter.

“[The regime is] not fair as they did not take into account my circumstances and that there was unfair play happening.”

Debtor – Creditor’s Petition

“It prejudices needlessly people who need not be prejudiced against…. when it begins enforcement, it uses a common denominator that destroys peoples’ lives no matter what the specific situation….it is absolutely destructive - needlessly destructive.”

Debtor – Creditor’s Petition

5.2 Overall views on fairness – IPs

IPs believe that the regime is, on balance, fair overall to both debtors and creditors, whilst acknowledging the complex balance of conflicting stakeholders’ needs and objectives. The regime was thought to offer good opportunities for those in financial distress, whilst providing a framework for creditors to get returns on debts. However, IPs highlighted the dynamic nature of the balance, noting that with the introduction of new legislation the weighting between maximising returns for creditors and providing debt relief for debtors shifts slightly to favouring one party over the other.

“Sometimes rules change which make it more creditor-friendly, then it will go the other way and be debtor-friendly.”

Insolvency Practitioner

IPs with lower confidence in the regime thought that at this time, the legislative framework, with the introduction of bankruptcy discharge changes reducing the automatic discharge period from 3 years to 1 year by the Enterprise Act 2002 [Enterprise Act 2002. Available at: https://www.legislation.gov.uk/ukpga/2002/40/contents], was slightly skewed towards debtors as the amount that creditors can recover is very limited. Furthermore, within the balance of maximising returns for creditors, there was a skew towards larger creditors at the expense of smaller creditors.

“Less fair for unsecured creditors / smaller creditors who are bottom of the list and less likely to get money back.”

Insolvency Practitioner

“[The] Bankruptcy regime is now very fair [for debtors] as 12 months is such a short time [for individuals to be released from their debts], but this makes it less fair for creditors.”

Insolvency Practitioner

IPs highlighted that, given the limited enforcement actions or prosecution of individuals committing misconduct, some individuals can repeatedly escape repayments to creditors with directors able to set up multiple businesses in succession.

Both IPs and debtors questioned what they perceived to be equal access to, and enforcement of, insolvency procedures across debtors, no matter the circumstances or level of debt and an insolvency regime that failed to either isolate or exclude risky debtors. In their view they saw a significant difference between those debtors that entered insolvency proceedings due to unforeseen or external factors and those that entered due to risky (or illegal) behaviour. They saw a similar difference between those debtors who had accumulated significant debt, into the hundreds of thousands of pounds, versus those with substantially lower debts being forced into the same insolvency procedures including IVAs, Creditors’ Petitions and Debtors’ Applications.

As outlined by the World bank Working Group on the Treatment of the Insolvency of Natural Persons [World Bank. Working Group for the Treatment of the Insolvency of Natural Persons. (2014) Paragraph 124. Available at: https://documents1.worldbank.org/curated/en/120771468153857674/pdf/ACS68180WP0P120Box0382094B00PUBLIC0.pdf], “the most sensible response to moral hazard in this context, and the one adopted by many existing insolvency systems, is to design and implement proper access requirements—both for entry into the insolvency system and for receipt of a discharge or other relief— in order to isolate and exclude debtors who engage in excessively risky or other undesirable credit behaviour.” The evidence above suggests IPs and debtors perceive the implementation of proper access requirements to be an area of improvement for the regime.

5.3 Enforcement

As highlighted above, debtors were largely unaware of the enforcement regime and framework that constitutes it. They did, however, believe that there were substantial disclosures required from them that they believed limited a debtor’s ability to commit fraud or other misconduct during the insolvency process. They also understood the need for enforcement and supported the role it plays as a deterrent for misconduct.

“So, if there was any fraud occurring the regime would pick up on it straight away.”

Debtor - Debtors’ Application

“If you’re employed legally with payslips on the system you can’t lie about that. However, if a person is working cash in hand where they are not legally employed there is a fear that you can hold something back.”

Debtor - Debtors’ Application

Where debtors had an opinion, they believed it was difficult to reduce misconduct beyond a certain point, no matter the protections in place in the regime.

“They’re probably doing the best they can with the resources they’ve got but they’re never going to kill it all. There’s just too much.”

Debtor – Debtors’ Application

IPs however, held a negative view of The Insolvency Service’s enforcement activities for both personal and corporate insolvency in terms of prevention, detection and tackling wrongdoing.

“Mainly ineffective as it is unable to pursue fraudsters through the courts or get back money for creditors in any meaningful way - mainly due to underfunding and the difficulty of getting information due to GDPR legislation etc.”

Insolvency Practitioner

IPs highlighted perceived limitations of the existing enforcement framework, with debtors that have gone through multiple insolvency proceedings; rules that don’t exclude directors that have gone through multiple insolvencies from owning multiple firms; and what were felt to be other significant loopholes in the regime.

“There are a few bad apples that have figured out the system and how to exploit it.”

Insolvency Practitioner

IPs felt that whilst mechanisms to detect fraud and misconduct existed, they were unsure if the regime is flexible enough to respond to evolving concealment methods in both personal and corporate insolvencies.

“There are so many new asset classes so you can never be 100% sure and have to rely on whistle-blowers.”

Insolvency Practitioner

IPs highlighted that whilst the regime can detect fraud and misconduct, subsequent enforcement action was rarely taken, particularly for corporate insolvency. The cost of enforcement action to The Insolvency Service was thought to be prohibitive to taking those actions. Limited resources of The Insolvency Service was seen as the reason behind this limited pursual of enforcement cases.

“Legislation is in place. E.g., Restriction orders and personal liability. However, it needs more resource to be able to enforce it properly.”

Insolvency Practitioner

“There are people who are prosecuted for fraud but it’s a numbers game….one might get caught but 19 are going to get through.”

Insolvency Practitioner

An area of particular concern for IPs were other IPs that provided insolvency services to debtors, typically IVAs, with lower standards of checks and limited investigation for financial misconduct.

“If you’re running an IVA factory is anyone looking at that? That’s all about profit and getting as many jobs signed up as possible rather than care or investigation. Good places and good IPs will find it (fraud) where it is.”

Insolvency Practitioner

With regard to personal insolvency, IPs questioned whether the regime was able to prevent the concealment of assets or income by debtors and the role this played in creating the high costs of pursuing enforcement actions. However, as highlighted in the World bank Working Group on the Treatment of the Insolvency of Natural Persons [World Bank. Working Group for the Treatment of the Insolvency of Natural Persons. (2014) Paragraph 124. Available at: https://documents1.worldbank.org/curated/en/120771468153857674/pdf/ACS68180WP0P120Box0382094B00PUBLIC0.pdf], “no easy or perfect solution to this problem exists”.

“Whilst an IP might meet people and know they have something hidden, proving it in court is expensive if it gets to that point.”

Insolvency Practitioner

“The regime can deter and detect fraud, but I doubt the inclination or resources are there to pursue.”

Insolvency Practitioner

5.4 Standards

Debtors felt that stakeholders they interacted with during the insolvency process acted ethically and to high professional standards. IPs agreed that in large part, the industry is highly regulated, with substantial checks and balances. Additionally, there is significant competition in the industry that has prevented exorbitant rises in IP fees, and an effective complaints gateway to address issues for concern amongst debtors.

“The majority act with high ethical standards as it is highly regulated.”

Insolvency Practitioner

“As an industry we get kicked and shouted at. It often feels like we are an easy target, when actually the majority of us do everything by the book and to a really high standard. All it takes is one or two rogue people and they’re the ones who get the publicity.”

Insolvency Practitioner

“Most IPs are licensed and scared of losing that licence. They do a fair job in the circumstances to follow the legislation.”

Insolvency Practitioner

However, whilst stakeholders broadly felt that the regime was supported by high ethical standards, perceived instances of bad practice were referenced through this research. There were mixed reviews when examining the role of debt servicing companies and some IP organisations, so called “IVA factories”. Additionally, there were felt to be a number of IPs that take cases where they can be less certain that there isn’t fraud or misconduct, in order to gain higher fees.

“Most IPs are responsible and ethical, but those dealing with high volumes (factories) may fall foul since they just want the fee, and don’t maintain high standards.”

Insolvency Practitioner

“When the first Debt Advice company advised me on setting up an IVA, they told me to inflate my bills so that my payments would be less.”

Debtor - IVA

In their role in providing assistance to debtors, third sector organisations played a key role in ensuring ethical and unbiased advice was given to debtors. However, creditors’ petition debtors, as debtors who were forced into insolvency, did not feel that stakeholders, either creditors, IPs and/or the Insolvency Service itself acted ethically, and felt prejudiced.

“I think it’s very low, just a flock of vultures picking over my bones.”

Debtor – Creditor’s Petition

Focussing specifically on The Insolvency Service staff, debtors felt staff acted professionally, ethically, and treated individuals with respect during their insolvency procedures.

“It’s not a very nice route for anybody to have to take, but there would be nothing worse than being totally belittled and made to feel absolutely shocking.”

Debtor – DRO

“Felt they were very professional and understanding, with no judgement of me and my situation.”

Debtor – DRO

“They are kind of like an IP with no agenda…. about as fair as you could ever be.”

Debtor – Creditor’s Petition

Overall, findings on standards appear to broadly align with The Insolvency Service vision outlined in the 2021-2026 strategy [The Insolvency Service. The Insolvency Service Strategy 2021 to 2026. Available at: https://www.gov.uk/government/publications/the-insolvency-service-strategy-2021-to-2026/the-insolvency-service-strategy-2021-to-2026], for the insolvency system to be underpinned and supported by a profession that is recognised for the highest professional, technical and ethical standards when carrying out its work. Nevertheless, some issues were still identified, such as around the role of debt servicing companies and some IP organisations.

5.5 Areas for improvement

IPs felt that significant improvements needed to be made in how the regime tackles fraud and financial misconduct. On the one hand, there was a feeling that corporate insolvency enforcement is, at times, unfair on owners of small businesses who, in their opinion, are overly investigated for fraud. IPs thought the regime could improve how they filter between the genuine and fraudulent insolvency cases to reduce the costs of insolvency and time consumed in the vast majority of cases.

On the other hand, IPs felt that the current level of funding to pursue fraudulent parties was substantially inadequate and that other than in extreme instances of fraud, plenty of cases of fraud and financial misconduct receive no enforcement action.

6. Efficiency

The regime was viewed to be efficient on the whole, with clear and accessible guidance and resources, including digital resources, fairly quick timescales and low costs. Debtors and IPs that had been involved in court proceedings viewed them positively and being able to conduct them virtually was ideal.

6.1 Guidance and resources

Overall, the guidance and resources provided by The Insolvency Service were seen to be clear and accessible. This aligned with The Insolvency Services’ strategic objective of providing a clear and accessible user journey for people in financial distress. IPs were felt to play a key and effective role in guiding debtors through the process. For DRO and IVA debtors, the use of a third party was often recognised as being helpful in facilitating the whole process and providing helpful unbiased guidance along the way, complementing, and at times overlapping, the role of the IP in the process. These advisors were debtors’ point of contact and included members of charitable organisations like the Citizen’s Advice Bureau (CAB), StepChange and the Royal British Legion.

Despite guidance and resources being clear, there was some room for improvement around the language and support available. IPs and debtors felt that the guidance from the Insolvency Service provided to debtors could be conveyed in plainer English with less use of technical language to be more accessible, especially for those with dyslexia. It was also thought that more verbal forms of guidance from a human advisor would be helpful, given the sensitivity of the issue, and could put debtors at ease when searching for additional information about their situation.

“I think that human, that touch human contact is still so important.”

Debtor - Creditors’ Petition

IPs acknowledged that a change in debtors’ awareness, with many researching their situation before meeting with IPs, meant that there was scope for misinterpretation of which options would be most suitable to a debtors’ situation, but felt that this wasn’t a significant issue.

“More people come into that meeting these days having done a bit of research than they used to have done.”

Insolvency Practitioner

In relation to corporate insolvency, smaller firms were identified by IPs as needing more help and guidance than larger firms. This was due to the legal resources that larger firms could make use of, while smaller firms usually used an accountant, friends or family to advise them through it.

6.2 Digital Resources

Having digital tools and resources available online was viewed positively on the whole by debtors. They were seen to be clear and accessible. They were also seen to lead to an increase in the efficiency of the process, resulting from less time and money spent on posting documents, travelling to and from meetings, and less in person court proceedings. The use of digital tools in this way aligns with the agency strategy of becoming a ‘digital first’ provider.

The inclusion of digital resources into the process was seen to be less stressful since debtors could attend meetings without taking time off work and having to worry about travelling to the location. Using the online tools more specifically was beneficial since debtors could view the status of their proceedings easily and data entry tools meant that all calculations were done instantly.

On the other hand, some debtors were thought to be at a disadvantage if they don’t own or have access to a computer, or if they are less IT-literate.

“I’m not good with technology – I can’t send an email.”

Debtor - DRO

Another also thought that third party resources [StepChange tools and resources] were seen as preferable to Insolvency Service resources:

“A lot clearer as well, The Insolvency Service’s resources felt very old.”

Debtor – Debtors’ Application

Increasing awareness of the Insolvency Service resources was also something that could be improved upon, as some debtors were only aware of these later in the process when there was less of a need for them.

IPs had a more negative view of the functionality of the online resources. They thought resources were outdated, unsecure and not user friendly. The digital tool used to manually input details of creditors into the system was thought to be very time consuming for IPs.

“Something that could be done in 5 minutes might take you an hour.”

Insolvency Practitioner

In response to this predicament, it was suggested that a postcode search function could help save time for IPs in data entry. Another suggested improvement to the online resources, was the provision of tools related to tracking crypto currency, and online databases for tracking people and assets. These tools were reported to be very expensive, so if The Insolvency Service were to provide them then this would reduce overall costs for IPs.

“If The Insolvency Service had a tool of its own that could be used to track crypto assets for example, that would help all round.”

Insolvency Practitioner

The availability of support from The Insolvency Service was viewed positively by debtors, and they were able to chat through any issues that may come up whilst using the online resources. IPs again had a more negative view of this support and often experienced difficulties getting in contact with the Insolvency Service.

­ “If you email, they don’t reply. If you ring, they don’t reply so there could be more help there digital or otherwise.”

Insolvency Practitioner

The Insolvency Service website was seen as a useful online resource for IPs, who at times directed debtors there to access more information. However, when the website is googled, it doesn’t always come up as the first result, thus lowering the likelihood of debtors accessing the correct information. Unfortunately, it was thought this could result in debtors or company directors accessing fraudulent websites that have been set up to scam debtors, or commercial websites soliciting clients for insolvency services.

“There have been a few shut down over the years that tried to encourage directors to do dodgy things. It is difficult if you are researching as the director of a company … if they look on The Insolvency Service website, they can find regulated IPs and go for one, but people don’t unfortunately always do that.”

Insolvency Practitioner

6.3 Timescales and Costs

Overall perceptions of timescales were positive, but there was a wide variation in the length of proceedings for different debtors. Some experienced processes occurring in just 24 hours, while others experienced a long and drawn-out process over 2 years. Where proceedings took longer, this was usually in relation to the COVID-19 pandemic delaying various aspects, such as in-person meetings. This suggests the regime could be more consistent in delivering to shorter timescales, which would improve the insolvency system in relation to time, one of IMF’s suggested core indicators of efficiency [IMF. IMF Working Paper: The Use of Data in Assessing and Designing Insolvency Systems (2019). Available at : The Use of Data in Assessing and Designing Insolvency Systems (imf.org)].

IPs also referenced the impact of COVID-19 delaying timescales. This was in relation to HMRC dealing with a backlog of cases since companies refrained from applying for insolvency during the pandemic, as temporary restrictions to help protect viable businesses from going under meant creditors couldn’t pursue these companies. Other issues related to HMRC were due to outstanding tax issues that also delayed progress.

“We have lots of issues at the moment because the inland revenue is behind the tax clearance and a lot of those are dragging on, but there is nothing we can do about it.”

Insolvency Practitioner

An aspect of insolvency proceedings that took up more time for a lot of debtors was inputting the details of each of their debts online.

“Is this how much I owe? Not only just the physical pain of writing it all down and searching for it and getting the right numbers, but at the same time you are acknowledging, finally that you’re in trouble.”

Debtor – Debtors’ Application

Similarly for IPs, administrative work around compliance was reported to be particularly burdensome and at times unnecessary. Having to produce materials for creditors and debtors that were lengthy and not always read was a hugely time-consuming and costly process for IPs.

“There is massive compliance around insolvency, which is hugely burdensome. Commercially it makes sense for insolvency to be dealt with relatively quickly otherwise they can be very expensive for the practitioner.”

Insolvency Practitioner

“All sorts of anti-money laundering requirements, but the incidence of breach is so rare and remote that it almost makes it uneconomic.”

Insolvency Practitioner

Costs across the regime (another IMF core indicator of efficiency [IMF. IMF Working Paper: The Use of Data in Assessing and Designing Insolvency Systems (2019). Available at : The Use of Data in Assessing and Designing Insolvency Systems (imf.org)]) in general were thought to be low by both debtors and IPs, and the online nature of proceedings was a contributing factor to this. There were, however, mixed views from debtors around the initial bankruptcy fee and other related costs. Some thought these were quite steep, while others thought it was a reasonable price to pay to get out of a bleak financial situation.

“I thought that was a very good deal to just pay that little to get the ball rolling in the right direction.”

Debtor - DRO

“You know what makes me laugh with that? It’s that you know they’ve said I’m bankrupt and have no money, but they expect you to make all the calls, to drive to court and other places and have these interviews.”

Debtor - Creditors’ Petition

Further to this, creditors receive lots of paperwork from IPs that is at times unnecessary. IPs thought that creditors were only interested in whether they were getting any money back and didn’t have time to read through pages of reports.

“Paperwork is a bit onerous for creditors because there is so much information, we have to give them things they don’t want – they want a page saying are we getting any money or not, and not a ten-page report … they don’t care what we have done.”

Insolvency Practitioner

6.4 Court Procedures

Very few debtors had attended court proceedings, but in cases where it was necessary (mainly Creditors’ Petition debtors), those involved were broadly positive about their experience. Debtors thought courts and judges were fair and reasonable in their conduct and that judges had the required expertise for these proceedings. This was in line with the IMF objective that judges have adequate experience in financial matters [IMF. Orderly and Effective Insolvency Procedures (1999). Available at: https://www.imf.org/external/pubs/ft/orderly/index.htm]. The ability to engage in court proceedings online or over the phone was preferable to both Creditors’ Petition debtors and IPs, due to saving costs of travelling, saving time, and the higher convenience. It also removed some of the stress and shame debtors felt around having to physically go to court.

6.5 Predictability

Intuitive Insolvency Procedure

Overall, both IPs and debtors agreed that the insolvency procedure was intuitive for debtors but disagreed that it was predictable. Its intuitive nature was elicited through rules being standard across the board. This meant that if individuals or companies had been through multiple insolvencies, they knew what to expect after their first occurrence.

“Once you’ve done it, you’re going to understand it more. We have got a sophisticated regime.”

Insolvency Practitioner

In terms of predictability, the influence of external factors was thought to disrupt outcomes of insolvency proceedings. Examples provided included the pensions regulator lodging a claim which might stop a sale of a business, or TUPE (Transfer of Undertakings (Protection of Employment)) regulations which can also interrupt proceedings. This could result in creditors not receiving their money and businesses collapsing. This contributed to IP’s lack of faith in the predictability of the insolvency procedure and highlights a potential shortfall in meeting the IMF objective of having predictable procedures to provide confidence in the credit system and fostering economic growth [IMF. Orderly and Effective Insolvency Procedures (1999). Available at: https://www.imf.org/external/pubs/ft/orderly/index.htm].

Economic Stability and Growth

There were mixed views from stakeholders on the extent to which the regime promoted economic stability and growth. Those who were more positive in this aspect thought that the ability for insolvent individuals and companies to have a fresh start was an effective aspect of the regime that enabled individuals to emerge from unsustainable debts.

“It does give you a fresh start… less worry about paying bills.”

Debtor - Debtors’ Application

IPs also believed that the regime helps facilitate the continuation of the financial cycle, wrapping up old non-viable companies, and allowing new businesses to develop.

“Stability is provided. Growth, I believe when one company falls another spring up in its place and seize the opportunity so yes there is growth potentially as part of the regime.”

Insolvency Practitioner

Stakeholders who had a lower confidence in the regime and didn’t think the regime promoted economic stability and growth, thought that this was due to the limited returns creditors receive. This hampered their ability to invest in new products and services. Further to this, for corporate insolvencies, it was thought that the time taken for a company to be salvaged is too long which prevents growth from occurring.

The COVID-19 pandemic has also been a significant factor that affected the natural flow of business and restricted the regime’s ability to promote stability and growth; as there were limited avenues available for profitable firms that struggled during the pandemic.

“Companies who are owed money need to collect it … if they have no access to money they can’t invest in new equipment or products.”

Debtor - DRO

6.6 Areas for improvement

IPs felt that they are required to spend too much time conducting processes required by the current legislation that they consider unnecessary in the majority of business cases. They believed some of these processes could be streamlined, or perhaps even removed as a requirement for smaller businesses or other special circumstances and consider that much of the required paperwork is of little relevance to the circumstances of these businesses. One IP suggested improving the regime’s focus on the needs of smaller businesses as a way to address this problem.

“A lot of the rules and the way they are looked at are not appropriate to the vast majority of insolvencies. The sort of things around conduct, money laundering and things like that are more appropriate for very large insolvencies, than the vast majority of insolvencies that happen.”

Insolvency Practitioner

IPs also expressed concern at the efficiency of the Official Receiver’s Office and their limited accountability and regulation, as well as their retention of a significant number of cases in-house. They believe that due to being under resourced and understaffed, shifting some of these cases to the private sector would lead to quicker turnarounds for personal and corporate insolvency cases and ensure that more cases fall under regulated service providers.

There was also discussion of what could be done in the time after the insolvency procedure has been approved as debtors had very limited interaction with The Insolvency Service directly. Debtors felt that they would have benefitted from more communication from The Insolvency Service and other organisations to provide reassurance that they are doing things correctly and that everything is on track. One respondent described this as the ability for the regime to provide “more human support”.

7. Effectiveness

7.1 Overall views on effectiveness – IPs

Overall, IPs varied in their views around the effectiveness of both regimes. Most criticisms were related to the lack of return for creditors and how the reintroduction of HMRC as secondary preferential creditor has exacerbated this. As a result, the regime could be seen as balanced towards debtors, at the expense of creditors. On a more positive note, it was thought to be effective in enabling viable companies to survive and allowing a smooth exit for non-viable companies, an aspect which is frequently mentioned as a core principle of effective insolvency systems, as outlined by the European bank for reconstruction and development [European Bank for Reconstruction and Development. EBRD Core Principles of an Effective Insolvency System], World bank [World Bank. Principles for Effective Insolvency and Creditor/Debtor Regimes (2021). Available at: http://hdl.handle.net/10986/35506] and OECD [Organisation for Economic Co-operation and Development. OECD Economics Department Working Papers: Design of insolvency regimes across countries (2018). Available at: https://doi.org/10.1787/d44dc56f-en]. It also discouraged investment in insolvent businesses that weren’t viable. It was, however, perceived to be lacking in its ability to incentivise stakeholder participation of small creditors; a key economic objective identified by the IMF to allow rehabilitation [IMF. Orderly and Effective Insolvency Procedures (1999). Available at: https://www.imf.org/external/pubs/ft/orderly/index.htm].

7.2 Overall views on effectiveness - Debtors

Overall, debtors with both high confidence and low confidence in the regime felt that the regime was effective in being able to improve their financial wellbeing, enable a fresh start and allow financial rehabilitation moving forwards. However, despite some positivity there were numerous criticisms and improvements suggested in how the insolvency regime could rehabilitate insolvent individuals and prevent future insolvency, reduce barriers to getting help earlier (reduce stigma), and transparency in the accessibility of insolvency information. These were especially prevalent from those debtors with lower confidence, typically who had been through a Creditors’ Petition.

7.3 Balancing the needs of stakeholders

IPs had mixed views on whether the regime(s) met the needs of all stakeholders. In examining the regimes’ balancing the needs of debtors with maximising returns for creditors, IPs felt that as the system currently favoured debtors, creditors lost out and were unlikely to recover much of the debt during insolvency procedures.

“In theory it does but in practice it doesn’t…at the end of the day the creditor is going to get very little.”

Insolvency Practitioner

In relation to corporate insolvency and balancing the needs of employees versus employers, the regime was thought by IPs to be more beneficial for employees. IPs thought that it was possible to sell a business going through insolvency, or parts of it, and protect jobs. Employees also receive redundancy payments and help to find employment should those companies fail. However, it was also noted that it was inevitable for some jobs to be lost through insolvency proceedings and that, given the timescales on some insolvencies, proper consultation and notice for employees is, at times, impossible.

“It’s a decent system in that respect. It’s not a great time for them [employees] but they do still get their money, and fairly quickly as well.”

Insolvency Practitioner

7.4 Meeting the needs of SMEs

IPs held varying views of whether the current regime meets the needs of small and medium sized enterprises (SMEs). In terms of the insolvency processes available to SMEs, IPs thought that it was better for them to utilise traditional processes like Company Voluntary Arrangements (CVAs) and Company Voluntary Liquidations (CVLs) rather than moratoriums, which were thought to be prohibitively expensive for them. However, IPs felt that the most economical route of insolvency: a CVA, was less fit for purpose for SME creditors, due in part to the delay in receiving payment over 3-4 years. IPs with lower confidence in the regime felt that this highlighted a lack of efficient options appropriate for SMEs and its inability to meet their needs in this respect.

In relation to SME creditors, the limited returns available for them was mentioned as a result of HMRC being reinstated as a preferential creditor. Additionally, IPs discussed what was felt to be a significant administrative burden of the regime(s) on SMEs, given their limited available time and resources, and the limited availability or specificity of digital tools for SMEs to upload documents required for compliance or insolvency processes. Thus, highlighting that there is room for improvement in the regime to better meet the needs of SMEs.

The regime could do more to align with the following core principle of an effective insolvency regime, as set out by the European Bank for reconstruction and development [European Bank for Reconstruction and Development. EBRD Core Principles of an Effective Insolvency System.]; to meet the needs of its major market participants, including SMEs. The law should have the procedural flexibility to meet the needs of different participants. This is an important aspect of the regime since smaller businesses are more susceptible to economic downturn than larger ones due to smaller operating margins and less reserves.

7.5 Viable and non-viable company survival

In relation to corporate insolvency and the extent to which the regime allows a viable company to survive, IPs felt that the current regime was fit for purpose. CVAs and administrations were seen as effective tools to enable survival, but IPs with lower confidence in the regime also discussed a limited effectiveness of CVAs, with an IP suggesting that these companies fail despite the CVA:

“You’re talking about CVAs, and I don’t think they work generally.”

Insolvency Practitioner

Moratoriums were also discussed positively as they allowed business’ breathing space to formulate plans while being protected from failure. Overall, in comparison to other countries’ regimes the insolvency regime was thought to be better at identifying what is viable.

It is worth noting that some of the sampled IPs had expressed positive attitudes towards the recent Restructuring Plans (RPs) launched in 2020 though they had no experience of dealing with RPs [The Insolvency Service. Restructuring plan guidance (2020). Available at: https://www.gov.uk/government/publications/corporate-insolvency-and-governance-bill-2020-factsheets/restructuring-plan].

“I think [the regime] is fit for purpose to a large extent and moving in the direction of [company] restructuring rather than insolvency which is probably a good thing.”

Insolvency Practitioner

IPs felt that the process for allowing companies a smooth and timely exit as it currently stands was thought to be an efficient process. For non-viable companies, IPs believed that the regime allows them to go into Creditors’ Voluntary Liquidation (CVL) or compulsory liquidation quite quickly, thus allowing the viable parts to be restructured; and in smaller businesses they can be set up as separate legal entities.

However, as mentioned above, IPs with lower confidence in the regime also thought that businesses are rarely aware of the potential benefits of insolvency procedures and typically wait until the company is non-viable, leaving IPs with the only option to liquidate the business.

“The ones we get aren’t usually viable. You may have components of a business that’s good and these may be sold. But usually if [a business] gets into insolvency, it’s terminal.”

Insolvency Practitioner

7.6 Maximising return to creditors

A common critical theme that came out from IPs was the minimal return for creditors from insolvency procedures and the regime’s ineffectiveness against the objective to maximise returns to creditors. Maximising the value of a firm’s assets and recoveries by creditors is a feature identified by the World bank as being a key objective of an insolvency regime thus highlighting a specific area of the regime to improve upon [World Bank. Principles for Effective Insolvency and Creditor or Debtor Regimes (Revised, 2015). Available at: https://www.worldbank.org/en/topic/financialsector/brief/the-world-bank-principles-for-effective-insolvency-and-creditor-rights].

IPs highlighted the reintroduction of crown preference that puts HMRC back as a secondary preferential creditor. This order of priority pushes unsecured creditors further down the list and redistributes how assets are allocated, thus making unsecured creditors less likely to receive as much as they may have done before this change.

“The decision by HMRC to give themself preferential status has prejudiced the rights of ordinary unsecured creditors significantly… it means with a lot of insolvencies employees and HMRC are the only people who get anything by way of distribution.”

Insolvency Practitioner

As part of the regime’s ineffectiveness in maximising returns for creditors, IPs discussed the regime as being further skewed towards larger creditors at the expense of smaller creditors, given their lower voting power, who often receive little, if any, returns.

“There’s only so much to go round. There’s an order of distribution and an order of priority.”

Insolvency Practitioner

7.7 Investment decision making

IPs thought that the regime generally discourages investors from investing in an insolvent business, with the order of priority of creditors and reintroduction of crown preference. As part of the benefits of insolvency procedures, it allows viable businesses to regenerate and recover, make new investment and therefore promotes economic growth, a key part of the Insolvency Service’s five-year strategy.

“If you’re looking at it from an investment point of view, the regime allows businesses to almost start again with a bit of a clean slate. You might say you’ll use The Insolvency Service to reposition the business and invest in a new company, rather than invest in the old one which could go down the pan and you won’t see any return for your investment.”

Insolvency Practitioner

7.8 Incentivising stakeholder participation

IPs thought that the regime did incentivise stakeholder participation providing avenues for creditors of all sizes to participate, but that the ability to impact decision making through stakeholder participation favoured bigger creditors with more voting power.

“All creditors and shareholders are given an opportunity to have their say even if they haven’t got enough voting power to do anything about it.”

Insolvency Practitioner

IPs believed the shift online in stakeholder engagement that was meant to encourage participation has been ineffective and that participation is still limited. They highlighted that the disengagement was again linked to limited returns for creditors.

“There is ability for stakeholders to get involved, but they choose not to.”

Insolvency Practitioner

7.9 Impact on the individual

Debtors highlighted the effectiveness of the regime in helping those in financial distress, a core objective of The Insolvency Service 2021-2026 strategy, and providing those debtors with the potential for a fresh start. There is not one widely accepted definition of a fresh start in this context, but a broad outline can be found in the “Unlocking a new start” report published by Christians Against Poverty which considers there to be six elements [Christians against poverty. Unlocking a new start. (2019). Available at: https://capuk.org/fileserver/downloads/general/Unlocking_a_new_start__insolvency_briefing.pdf]:

• Financially healthy
• Improved relationships
• Socially included
• Good emotional wellbeing
• Positive self-worth
• Being able to move forward

Debtors with a medium and high level of confidence in the regime discussed all of the elements above and the valuable role the insolvency procedure had on them during a crucial period in their lives and the role it has played in enabling a fresh start, especially on their emotional and financial wellbeing. Debtors with a lower confidence in the regime didn’t experience any significant benefits or changes to their financial situation.

“It was such a relief to have someone going through all your income and outgoings and sort it all out…. relieves so much stress…. Also knowing I wouldn’t have to lose my job.”

Debtor - IVA

Those subject to a Creditors’ Petition were markedly different from other debtors in how they viewed their financial wellbeing and general wellbeing. There was a prevailing feeling that insolvency had made things more expensive for them and that they were less in control of their financial situation. These debtors discussed the “loss of service”, which has been highlighted as an existing barrier to a fresh start in the Christians Against Poverty report on Unlocking a new start [Christians against poverty. Unlocking a new start. (2019). Available at: https://capuk.org/fileserver/downloads/general/Unlocking_a_new_start__insolvency_briefing.pdf]. Loss of services like bank accounts, phone contracts, and monthly car insurance payment options had a negative impact on their own wellbeing.

“Your life actually becomes more expensive when you’re bankrupt… I can’t get any credit whatsoever and I can’t move house somewhere cheaper to manage that… it’s completely ruined me financially.”

Debtor – Creditors’ Petition

Contrary to the prevailing feeling of those subject to a Creditors’ Petition, debtors who had voluntarily entered an insolvency process felt that they were regaining control of a financial situation that had got out of control. Before insolvency, they felt powerless to respond to the numerous demands of creditors and were trying and failing to pay them all back whilst also going without essential items for themselves and their family. Despite the obvious drawbacks of insolvency with loss of service, the process allows them the living expenses that enable them to live a more “normal life” without the hassle from creditors.

“I can take the kids out now where before I was struggling to find a fiver.”

Debtor - IVA

In addition to the improvements to debtors’ financial wellbeing, debtors highlighted the significant impact the process had on their health and personal wellbeing. These benefits included significant reductions and relief of stress, improvements to familial relationships and wellbeing, improvements to their health, reduced insecurity and anxiety, amongst others. It was clear for those who provided high scores for confidence in the regime, this improvement in physical and mental wellbeing was a key factor when considering their score.

“I’m not worrying about the post or phone ringing.”

Debtor - DRO

7.10 Stigma

Debtors and IPs agreed that there continued to be considerable personal, psychological and societal negative stigma surrounding insolvency and individuals that have been through insolvency. There were three sides to stigma discussed by debtors and IPs:

• A personal and psychological barrier for debtors to seek help and enter insolvency;
• A misunderstanding of the regime and limited knowledge of the potential benefits of insolvency procedures that prevents debtors from considering it in times of financial distress; and
• A shame and embarrassment felt by debtors for becoming insolvent.

These findings on societal and personal stigma are in line with The Insolvency Service evaluation of the 2002 Enterprise Act [The Insolvency Service. The Insolvency Service. Enterprise Act 2002- Personal Insolvency Provisions: Final evaluation report. Available at:https://webarchive.nationalarchives.gov.uk/ukgwa/+/http:/www.insolvency.gov.uk/insolvencyprofessionandlegislation/legislation/evaluation/finalreport/report.pdf] and more recent findings from the Wyman Review, which noted that there is still much to do when it comes to removing stigma from those who need debt advice [Peter Wyman. Independent Review of the Funding of Debt Advice. (2018). Available at: https://moneyandpensionsservice.org.uk/wp-content/uploads/2021/03/peter-wyman-review-of-debt-advice-funding-2018.pdf]. We discuss each type in turn below.

The personal stigma debtors hold of the regime that acts as a barrier to seeking help was seen by debtors and IPs as unhelpful for cases of both personal and corporate insolvency. This stigma was due to debtors’ view that pursuing insolvency means that you must admit to yourself that you have failed at managing your own money, and this reflects on your value and worth as an individual.

“It took me 2-3 months to decide what to do. I carried on hiding it thinking I could deal with it because of the stigma of bankruptcy.”

Debtor - Debtors’ Application

“The fact that you can’t pay your debts takes something away from you - and your dignity.”

Debtor – Creditors’ Petition

Societal stigma was also seen to contribute to a limited understanding among the general public of potential options for individuals in financial distress. Debtors highlighted that they could have made steps to address their situation earlier by just having a little more knowledge of the options available to them, linked in part to their limited understanding of the regime(s).

“I think it’s because of my upbringing, my parents were negative about people who had gone bankrupt… and maybe that’s why I didn’t know that advice was there, I didn’t know that free system was there, I didn’t know help was there.”

Debtor – DRO

“Nobody talks about it. None of my family know I have an IVA, none of my friends…. it is like it doesn’t exist.”

Debtor – IVA

Lastly, debtors highlighted a personal shame and embarrassment of becoming insolvent, that they continued to feel. Findings from the World Bank’s “Working Group for the Treatment of the Insolvency of Natural Persons” [World Bank. Working Group for the Treatment of the Insolvency of Natural Persons. (2014) Paragraph 124. Available at: https://documents1.worldbank.org/curated/en/120771468153857674/pdf/ACS68180WP0P120Box0382094B00PUBLIC0.pdf] highlight there is a delicate balance to strike in this area as they note that some stigma is not necessarily a bad thing; “a healthy bit of stigma to deter debtors from seeking an easy way out of their legitimate obligations”. [World Bank. Working Group for the Treatment of the Insolvency of Natural Persons. (2014) Paragraph 124. Available at: https://documents1.worldbank.org/curated/en/120771468153857674/pdf/ACS68180WP0P120Box0382094B00PUBLIC0.pdf] Stigma can also persist after the insolvency procedure as can be seen below.

“I am still ashamed that I have had to go through it… I wouldn’t wear it as a badge of honour.”

Debtor – DRO

IPs and debtors felt that whilst significant stigma did exist, the stigma varied by insolvency procedure, with debtors undergoing bankruptcy through application or through a Creditors’ Petition feeling far greater stigma than those undergoing IVAs and DROs.

7.11 Transparency

Debtors, particularly those who had gone through a DRO, an IVA or Debtors’ Application, felt that the regime was transparent from the beginning, with clear options for insolvency and resulting consequences that were explained to them well.

“My process I felt was clear enough and I was always told if I had queries or problems, pick up the phone, which I didn’t do because I didn’t feel I needed to because everything was going smoothly.”

Debtor - IVA

However, there were also concerns about transparency. Both debtors (particularly those who had gone through a Creditors’ Petition and those who had a lower confidence in the regime) and IPs, said that debtors’ limited understanding of the process meant they did not feel the process was transparent in the resulting actions from a change of circumstances or the long-term implications of their procedure. This was, in part, due to the large amounts of information available and the difficulty for an average person to digest this information.

“The rules are all there and everyone can see, but not everyone is an expert or has done exams. We have a duty to put it in as plain English as we can and explain it as best as we can.”

Insolvency Practitioner

“They try to be transparent, but this involves bombarding people with paperwork, and they don’t read it, and fall back on old perceptions.”

Insolvency Practitioner

“If you put in ‘declare yourself bankrupt’ [into the search engine] you will have five commercial websites that will come up before the actual applying to become bankrupt.gov.uk… so anybody that is wanting to do that, bearing in mind they are under pressure, will have five or six websites come up before that which may well charge them additional fees to do it and might not give them the insolvency product that’s right for them.”

Insolvency Practitioner

IPs thought that transparency was much more effective for corporate insolvency. This was due to businesses having a greater network to talk to about insolvency and with many individuals with a pre-existing knowledge of insolvency.

“Usually [when dealing with a new client] they know at least one other business owner who has gone through insolvency and so they have an idea of what to expect.”

Insolvency Practitioner

For creditors, IPs thought that the transparency could be improved, with creditors often pursuing insolvency for their debtors without being aware of how little they are likely to get back, and ultimately leave disappointed.

7.12 Prevention and rehabilitation

Debtors were positive about the ability of the regime to rehabilitate them in terms of their financial control, which is positive when considering The Insolvency Service’s 2021-2026 strategy to prevent insolvency and rehabilitate thorough education and guidance [The Insolvency Service. The Insolvency Service Strategy 2021 to 2026. Available at: https://www.gov.uk/government/publications/the-insolvency-service-strategy-2021-to-2026/the-insolvency-service-strategy-2021-to-2026].

Primarily, debtors felt the system had enabled them to take greater control over their lives. It helped them improve their financial management and literacy for the future and help them to avoid any future insolvency.

“100% I won’t be in this position again. It’s taught me to be knowledgeable about income and where things are going.”

Debtor - IVA

Additionally, debtors also felt that the process of going through insolvency, and the restrictions that involves, serve as a deterrent against future insolvency.

“If you’ve been through it once and you realise how easily things can be taken away from you, you just wouldn’t get to that point.”

Debtor – Creditors’ Petition

In terms of prevention, debtors and IPs both focused on how education and awareness could be improved. Debtors and IPs felt that if debtors were aware of different options earlier, be that insolvency or otherwise, they would have pursued them. They believe this can be tackled with public information campaigns focusing on people going into debt and enhanced education in schools, especially for those who are about to leave school.

“There should be adverts that feature people getting into debt, are you aware that you’re heading down…. etc.”

Debtor – DRO

“There should be financial advice for teenagers and understanding the consequences of not managing money properly.”

Debtor - Debtors’ Application

Concerning corporate insolvency, IPs were mixed in their views on rehabilitation. On the one hand, they thought that there was less that could be done on prevention and rehabilitation due to the nature of business ventures being a heavily credit dependent process.

“I don’t think the regime itself will make may difference because people have a go at a business, and if it fails it is not going to put them off starting and having another go which doesn’t mean the next one will be successful because the other one failed under the insolvency regime.”

Insolvency Practitioner

IPs highlighted that prevention of future insolvency could be a negative objective for corporate insolvency as it might develop an additional barrier to resolve future financial problems that new businesses face sooner, in cases where this would be the most effective option to ensuring the survival of viable companies.

“I think most [corporates] feel it was less painful than they had anticipated so they will be more informed in future and would not shy away from insolvency and probably help them to deal with it better.”

Insolvency Practitioner

However, IPs also highlighted that they thought a lot more could be done to make directors of companies aware of their options and responsibilities.

“[More could be done for] education of directors on their responsibilities – 60-70% don’t [understand].”

Insolvency Practitioner

Overall, whilst debtors and IPs were generally happy with where rehabilitation is currently, they thought the regime’s efforts on prevention of future insolvency were less effective.

7.13 Areas for improvement

In order to further improve the effectiveness of the regime in prevention, debtors felt that there should be more training of lenders to recognise those at risk of unmanageable debt and be able to sign post where to go to get advice and help. This additional training was thought to be most relevant for staff at banks and building societies, who would be able to have information at hand for people who are clearly in severe financial distress. For example, one debtor believed that there were numerous points in their journey into financial distress at which people could have pointed her to options or third-party organisations she did not know existed, in order to get help.

IPs and debtors desired greater awareness of insolvency options amongst the public and corporate directors to prevent a number of personal bankruptcy or corporate dissolution cases. The aim of which would be to get individuals and companies to act earlier if they are in financial distress, which is a benefit to them and the economy as a whole. Debtors felt this could be done through public information campaigns and greater education in schools. This effort could focus on not only explaining the options for people who are experiencing financial difficulty, but it could also feature as a deterrent if done correctly. Concerning businesses specifically, IPs also thought that this would help their industry grow with additional cases as well as increasing the number of companies that could remain viable.

8. World-leading

8.1 Innovative and forward thinking

There was no clear consensus amongst IPs whether they see the regime as forward thinking and innovative. On the one hand, IPs saw the regime’s response to the Covid-19 pandemic as forward thinking and innovative. They felt it enabled plenty of perfectly viable businesses in normal economic circumstances to continue trading and expressed the compassion necessary for those struggling in what were unprecedented times.

IPs saw the move to electronic documents and the removal of the requirement for “pointless” physical meetings as a very beneficial step during the Covid-19 response, but the fact this was not the case before the pandemic shows how the regime might not be as forward thinking and innovative as it could be.

“It’s tried to be [innovative], but now that the pandemic has forced the court to accept electronic documents…it’s not exactly riding at the forefront of technology, is it?”

Insolvency Practitioner

On the other hand, IPs saw some drawbacks to this response too. There were fears that there is a backlog of cases which will all come at once now the pandemic is coming to an end, and as discussed above, discussions over the level of fraudulent claims in their pandemic response.

Aside from Covid-19, IPs presented a mixed picture. Some thought that the constraints of the present regime mean it is not practical to be innovative or forward thinking.

“It’s not [innovative]- it’s regulated to death!”

Insolvency Practitioner

Others thought that the level of consultation of the industry was one of the key factors that made it innovative as it was listening to IPs across the country, which is positive when considering the Hampton Principles [House of Commons. The Hampton Report. (2005). Available at: House of Commons - Reports by the Comptroller and Auditor General - The Speaker’s Committee on the Electoral Commission (parliament.uk)] which suggests that The Insolvency Service is showcasing good practice when consulting on new regulations. Despite this positive view of how the regime consulted, there were also suggested improvements to the consultation system which are discussed later in this chapter.

8.2 Comparison to other regimes internationally

The ability of IPs to make international comparisons were limited but where they could, they were generally favourable and most stated they thought the UK’s regime was amongst the best in the world.

“The UK is probably the leading regime, no other country does it better.”

Insolvency Practitioner

“As good as most, better than many.”

Insolvency Practitioner

On regimes elsewhere in the world, one common theme amongst those who often worked internationally identified how they viewed the “Chapter 11” framework in the USA and the Australian regime very favourably and thought the regime here could learn more from its director-led processes.

8.3 Cross-border insolvency

Principle 15 of the European Bank for Reconstruction and Development (EBRD) consider an effective insolvency system should facilitate the smooth conduct and resolution of cross-border insolvencies [EBRD. Core Principles of an Effective Insolvency System; principle 15. (2021) Available at: https://www.ebrd.com/legal-reform/ebrd-insolvency-core-principles.pdf]. The IPs involved in cross border insolvency thought there was significant room for improvement and noted that leaving the European Union has been a significant barrier to this.

“We are no longer members of the EU so the previous framework may no longer apply … yes, there were generally accepted rules [EU wide].”

Insolvency Practitioner

One particular problem was that pre-EU-exit, property recovery law was automatically recognised in Europe whereas now, property recovery has become much harder.

8.4 Consultation

IPs were positive about the levels of consultation with stakeholders over changes to the regime(s). Smaller IPs, whilst positive about consultation in general, noted that they thought larger IPs and associations are potentially overrepresented in these consultations and felt more consultation for smaller IPs would benefit the regime as a whole.

8.5 Areas for improvement

IPs suggested improvements were for better jurisdictional reach across borders to get money back; improvements to enforcement activity to tackle fraud and reworking the director disqualification; including additional financial penalties and sanctions.

9. Conclusion

The core strengths of the insolvency and enforcement regimes uncovered in the research, which underpin debtors’ and IPs’ confidence in the regimes were that:

• Debtors and IPs felt that the regimes were broadly fair and, whilst questioning the appropriateness of the one-size fits all approach for some persistent debtors or individuals prone to misconduct, acknowledged that the rules are the same for everyone.
• IPs acknowledged that the framework is one of the best of its kind in the world and those that had a high degree of confidence in the regime felt that, despite many areas for improvement, it was largely fit for purpose.
• Debtors were largely very happy with the process they experienced, that by and large, stakeholders acted ethically and to high professional standards, albeit with some notable exceptions.
• Debtors were grateful to have the option to go through one of the procedures and whilst significant stigma still exists, and prevented debtors from seeking help earlier, they have experienced significant improvements to their financial situation and greater overall wellbeing.
• Debtors and IPs felt that the process was, overall, relatively efficient and effective, with debtors provided with guidance and resources, reasonable timescales and costs and an intuitive system.

Some of the limitations around debtors and IPs’ confidence in the regimes were:

• That debtors’ confidence in the regime stemmed largely from their own interactions with the regime and the outcomes of their case and so it was significantly lower for those who were forced through insolvency with a creditors’ petition. Linked to this, debtors and IPs’ beliefs on the effectiveness, efficiency and fairness of the regime were in line with their overall confidence ratings, with those with lower levels of confidence scoring the regime lower across all elements of the regime.
• Debtors and IPs felt that debtors and corporate directors both had a limited understanding of the insolvency regime before entering into insolvency procedures and therefore are unaware of the potential benefits of these procedures.
• Debtors had limited awareness of the enforcement regime and very limited understanding of the enforcement regime and its legal framework. For those that did have awareness/ understanding, they described a lower level of confidence than in the insolvency regime.
• IPs believed that the enforcement regime is far less effective than the insolvency regime. Whilst stakeholders agreed that the regime is largely able to detect fraud, the regime was felt to be less effective in pursuing enforcement, due in part to what was viewed to be prohibitive costs for pursuing cases, and in the prevention of future insolvency cases and rehabilitation of debtors.
• IPs believed that elements of the insolvency regime that were less effective were balancing the needs of different stakeholders and recovering assets for creditors, especially for smaller creditors.
• Cross-border insolvency is an issue that IPs believe has not been effectively addressed and perceived leaving the EU as having a disruptive role.

10. Annex

10.1 Methodology

Sampling

The sample frame for the interviews, provided by The Insolvency Service, included a sample of:

• 4,878 debtors’ application debtors;
• 693 creditors’ petition debtors;
• 1,326 Insolvency Practitioners (only those taking on clients at the time of sampling);
• 14,757 DRO debtors; and
• 338,859 IVA debtors.

As the sample of IVA debtors did not contain telephone numbers for the research, a random sample of 800 IVA debtors was put through a telematching service, by IFF, to obtain contact numbers for the individuals. This yielded contact numbers for 247 individuals. A total of 200 contacts were drawn at random from each of the remaining stakeholder groups.

This resulted in a total sub sample of 1,047 individuals across the five stakeholder groups. Table 4 shows the distribution of the sample drawn as well as the response rates based on the number contacted. As can be seen, no additional draw of sample was necessary. All groups were able to be recruited with up to three attempts at contact. The creditor petition sample was the most difficult to recruit, in terms of the number contacted, of the five stakeholder groups.

Table 4. Distribution of the drawn sample, contacted, and interviewed

Stakeholder group	Sample drawn	Contacted	Total call attempts	Recruited (% contacted)	Declined (% contacted)	Unusable (% drawn sample)	Interviewed (% contacted)
Debtor - Application	200	89	178	18 (20%)	10 (11%)	6 (3%)	10 (11%)
Debtor – Creditor Petition	200	200	343	15 (8%)	21 (11%)	12 (6%)	10 (5%)
Debtor - DRO	200	90	225	16 (18%)	9 (10%)	11 (6%)	10 (11%)
Debtor - IVA	247	73	313	11 (15%)	17 (23%)	42 (17%)	10 (14%)
Insolvency Practitioners	200	72	248	11 (15%)	15 (21%)	34 (17%)	10 (14%)
Grand Total	1047	524	1307	71 (14%)	72 (14%)	105 (10%)	50 (10%)

Recruitment

Debtors and IPs were initially invited to participate through an invitation letter from The Insolvency Service, sent by IFF via email, in advance of being contacted directly by IFF Research. Those individuals were called and asked if they wished to participate, and if so, to indicate their preferred time(s) to be called for an interview.

A total of c. 524 people were contacted and screened to meet quotas based on debtor type as well as having a variety in debtors’ age, ethnicity, gender and level of debt prior to their insolvency procedure.

The initial research design plan was to achieve a mix in the sample recruitment in terms of ethnicity across all debtor types but were unable to meet that mix across DRO, Debtors’ Application and IVA debtors. As ethnicity data for debtors is not collected by The Insolvency Service, we are unable to determine the representativeness of this sample for that demographic.

Fieldwork

The semi-structed interviews followed a topic guide, provided in the Annex, and were conducted by a team of experienced IFF interviewers. Interviewers were briefed on the overall objectives of the research, core elements for consideration and taken through the topic guide in advance of launching the fieldwork, to ensure consistency in the approach. Interviewers had the flexibility to tailor the sequence of questions and freedom to either not ask questions they deemed not relevant to the respondent or ask new questions not in the topic guide if serendipitous findings arose. The topic guide allowed for the flexibility of responses gathered in line with the specific awareness and understanding of each stakeholder. Following an initial pilot fieldwork stage of the first five scheduled interviews, comprised of two DRO debtors, two Creditors’ Petition debtors and an IVA debtors, amendments were made to the topic guide to better reflect debtors’ limited awareness of the regime’s legislative framework.

Reflexivity

Analysis of the data was conducted by the IFF Research team and may have been interpreted through our own organisational or individual ideological perspectives/values/philosophies. This may have impacted the overall evaluation of the subject matter.

Ethics

IFF Research is an independent market research company, operating under the strict guidelines of the Market Research Society’s Code of Conduct, which is available to view on the MRS website (www.mrs.org.uk). This research has complied with GSR ethical guidance [Government Social Research. GSR Professional Guidance Ethical Assurance for Social and Behavioural Research in Government (2021). Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1000708/2021-GSR_Ethics_Guidance_v3.pdf

] and participation by debtors and IPs was entirely voluntary and participants were able to change their data and withdraw from the research at any point, in line with data protection law.

Uncertainty and Assumptions

Social desirability may also have impacted the current study since stakeholders were interviewed on behalf of The Insolvency Service. To mitigate this effect to a degree, interviewees were reassured that the research was being conducted by IFF Research, an independent market research company.

11. Appendix

11.1 Topic Guide

Introduction

• Good morning / afternoon. My name is [NAME] and I work for IFF Research, an independent research company. As was outlined in the letter that was sent to you and when we initially contacted you for this interview, we’ve been commissioned by The Insolvency Service to explore the confidence that stakeholders have in their insolvency and enforcement regime. Thank you for taking the time to speak to us today.

Purpose of the research

• Today we will be talking about your experiences of, and the extent to which you have confidence, in the insolvency and enforcement regime.
• This project will inform The Insolvency Service’s development based upon its new five -year strategic plan.
• As you know, the interview should last around 60 minutes. - if IP: we will be making a £40 charitable donation on your behalf - if Debtor: we will transfer £40 to you directly.
• IFF Research is an independent market research company, operating under the strict guidelines of the Market Research Society’s Code of Conduct. We will not pass any of your details on to The Insolvency Service or any other companies. It will not be possible to identify any individual or individual company in the results that we report to The Insolvency Service and the answers you give will not be traced back to you.
• Just to remind you, participation is entirely voluntary and will have no impact on any current or future dealings with The Insolvency Service in any way. We’ll be keeping your personal data for up to 6 months after the interview just for the purpose of ensuring we accurately captured your responses.
• Additionally, under data protection law (GDPR), you have the right to have a copy of your data, to change your data, or withdraw from the research at any point. Further information about this can be found on our website at: www.iffresearch.com/gdpr/
  • ADD IF NECESSARY: The recording will be stored on an encrypted area of our server at IFF and only the IFF researchers and IFF’s in-house quality assurers will have access to it.
• Do you have any questions before we begin?

12. Background of debtor / Insolvency Practitioner

DEBTORS ONLY

• A1 First of all, please could you tell me a little about yourself and the insolvency proceedings you have been through recently?

refer to screener info to guide this

• Age?
• Background to their insolvency proceedings?
• Are you or have you also been going through corporate insolvency?
• Level of Debt (if willing)
• ASK IF DATE OF INSOLVENCY WAS DURING OR AFTER MAY 2021: Did you make use of the Debt Respite Scheme (Breathing Space) prior to insolvency?
• Were you supported through the insolvency process by a third-party organisation, such as citizens advice?
  • Could you tell us who that third party organisation is?

INSOLVENCY PRACTITIONERS (IPs) ONLY

• Could you tell me a bit about your organisation and your role within it?
• Size of the business?
• How long have you worked there?
• Do you mainly deal with personal insolvencies, corporate insolvencies or both?

13. Understanding and awareness (5 mins)

NB: Section asked of debtors only to ‘warm’ them up /ensure they are thinking about the regime itself

DEBTORS ONLY

• How well do you understand the rules and procedures around insolvency and enforcement, known as the insolvency and enforcement regime?
• Where did you first find out about the regime (rules and procedures) around insolvency and enforcement?
• What do you understand the insolvency and enforcement regime to mean?

REFER TO text to outline insolvency and enforcement:

The insolvency regime refers to the overall insolvency legal framework (for which The Insolvency Service has policy responsibility) as well as the operational work The Insolvency Service delivers.

The enforcement regime incorporates The Insolvency Service’s work in respect of misconduct arising from insolvency and during the life of a company.

Together these regimes help The Insolvency Services’ aim to deliver economic confidence through;

• Supporting those in financial distress
• Tackling financial wrongdoing
• Maximising returns to creditors

• Are there any areas which you are confused by?

• 1## High level initial response (5 mins)

NB: We will return to this question at the end after discussing perceptions of fairness, efficiency, effective, and world leading

ALL

As I mentioned previously, The Insolvency Service wants to know to what extent people who have experience with insolvency, such as you, have confidence in the insolvency and enforcement regime.

ALL

• Overall, from your own experience, how confident are you with the insolvency regime?
• On a scale of 1-10 with 10 being very confident and 1 being not at all confident how confident would you say you are in the insolvency regime?
• Why do you say this?
• To what extend is this driven by: - Recent experiences? - Understanding of how it works? - Perceptions of The Insolvency Service?

ASK IF DEBTOR FEELS AWARE AND ABLE TO COMMENT ON THE RULES AROUND ENFORCEMENT – IF NOT, RECORD A “DON’T KNOW” RESPONSE

• Overall, from your own experience, how confident are you with the enforcement regime?
• On a scale of 1-10 with 10 being very confident and 1 being not at all confident how confident would you say you are in the enforcement regime?
• Why do you say this?
• To what extend is this driven by: - Recent experiences? - Understanding of how it works? - Perceptions of The Insolvency Service? ## Perceptions of fairness (10 mins)

ALL

For the remainder of the interview, I’m going to focus on your views on the insolvency and enforcement regime [IF IP, this includes both corporate and natural person insolvency].

As we outlined above, by regime I mean the rules set-out in law and procedures, overseen by The Insolvency Service, which aim to give confidence to people who have experience with insolvency such as you

ALL

• Overall, how fair do you consider the regime to be?
• Why? Why not?
• Do you agree/disagree that it treats all stakeholders (such as individuals, creditors or debtor businesses) fairly?
• Can you provide me with examples?

DEBTORS ONLY

• At the time of your insolvency, did you understand why it was necessary for you to go through insolvency procedures?
• EXCLUDING CREDITORS’ PETITION: How well explained was this? Who by?
• FOR CREDITORS’ PETITION: Were you made aware of the process before receiving the creditors’ petition?
• FOR CREDITORS’ PETITION: Was the process explained to you following your receipt of the creditors’ petition? Who by?
• Did you understand the consequences of the insolvency procedure?

IPS ONLY

• How well do people or businesses understand why insolvency procedures are sometimes necessary?
• How well do they understand the consequences of the insolvency procedure?

ALL

We are going to ask a few questions around the rules around enforcement, including financial wrongdoing, risky behaviour by debtors and fraud. Just to highlight, we are not referring to your personal insolvency and the reasons behind that, but instead want to understand whether you feel that the current rules enable that situation to arise.

ALL

• Thinking about prevention, how well do you consider the regime to discourage risky behaviour [IF IPs: either on the corporate or natural person side]?
• [IF DEBTOR] To what extent do you think creditors and lenders balance their profitability with ensuring there are no detrimental outcomes for debtors?
• [IF IP] To what extent is the regime able to mitigate against risky behaviour from debtors?
• [IF IP] To what extent do you think the regime helps prevent people getting into debt and reduced risky borrowing?
• [IF IP] What improvements could be made to reduce this risk?

ALL

• [If IP; in relation to natural persons] To what extent do you think that the regime correctly identifies people who should be given a ‘fresh start’ with their debts left behind, and people who should be restricted for longer, perhaps because they’ve acted recklessly or in a risky manner?

IPS AND ASK IF DEBTOR FEELS AWARE AND ABLE TO COMMENT ON THE RULES AROUND FINANCIAL WRONGDOING - IF NOT, RECORD A “DON’T KNOW” RESPONSE

• Thinking now about enforcement, to what extent do you think the regime is able to tackle financial wrongdoing? [If IP; in relation to corporate or natural persons]
• [IF DEBTOR] Do you understand why enforcement action sometimes needs to be taken?
• [If DEBTOR] Do you understand the consequences of enforcement action being taken?

IPS AND ASK IF DEBTOR FEELS AWARE AND ABLE TO COMMENT ON THE RULES AROUND FRAUD AND OTHER FINANCIAL MISCONDUCT - IF NOT, RECORD A “DON’T KNOW” RESPONSE

• How well do you think the regime is able to detect fraud and other financial misconduct? [If IP; in relation to corporate or natural persons]
• Does the regime prevent the concealment of assets and or income?
• How well do you think the regime is able to deter fraud?
  • How could this be improved?

IPS AND ASK IF DEBTOR FEELS AWARE AND ABLE TO COMMENT ON THE RULES AROUND FRAUD AND OTHER FINANCIAL MISCONDUCT - IF NOT, RECORD A “DON’T KNOW” RESPONSE

• And to what extent do you think the regime is able to tackle fraud or other financial misconduct? [in relation to corporate or natural persons]
• Does this vary by different stakeholders in the process?

ALL

• To what extent do you think that those involved within the insolvency system act with high ethical, technical and professional standards? [If IP; in relation to corporate or natural persons]
• Do those involved in the system share/provide enough information?
• Can you think of any good examples / bad examples?

IPS AND ASK IF DEBTOR FEELS AWARE AND ABLE TO COMMENT ON THE RULES AROUND SANCTIONS - IF NOT, RECORD A “DON’T KNOW” RESPONSE

• To what extent would you consider that those who break rules of the regime are identified quickly, and face proportionate and meaningful sanctions? [in relation to corporate or natural persons]
• Why do you say this?
• How do you think this could be improved?

IPS ONLY

• How well does the regime provide for the independent review of actions undertaken by the debtor (and in the case of a company, its management) in the period immediately prior to an insolvency procedure?
• To what extent does this occur? How often and in what circumstances?
• Why do you say this?

14. Perceptions of efficiency (10 mins)

ALL

• How clear and accessible is the advice/guidance available on the insolvency process? [If IP; this applies to both corporate or natural person insolvency]
• PROMPTS FOR DEBTORS EXCLUDING CREDITORS’ PETITION]
  • At the time of your insolvency, did you know what Insolvency procedures were available?
  • Were the options clear?
  • Did you know how to access them?
  • How did you decide which the best option was?
• PROMPTS FOR IPs
  • How well do your clients know what insolvency procedures are available?
  • How clear are their options?
  • Do they know how to access them?

  • Do they know when to use one approach over another?

  • In your experience, (DEBTORS: were; IPs: are) procedures completed within a reasonable timeframe? [If IP; this applies to both corporate or natural person procedures]
• Were/are there any aspects of the process that were/are particularly burdensome in terms of time?
  • What were/are they?
  • Were the timeframes of the insolvency procedures impacted by COVID-19? How were they affected by Covid-19? How significantly?
  • How could they be improved?
• To what extent do you think the regime enables early treatment of financial distress?
  • How well does it do this?
  • How could this be improved?

ALL

• To what extent do you consider that the regime minimises and reduce costs [IF DEBTOR: for your insolvency procedure]? [If IP; this applies to both corporate or natural person procedures]
• In terms of
  • exit costs? (Costs to exit the system, i.e. by becoming insolvent)
  • court costs? (through the availability of out of court procedures)
  • (IPS ONLY) restructure costs?
  • fees? (Including court fees, INSS fees, and other fees)

  • (IPS ONLY) reducing wasteful collection costs for creditors?

  • (DEBTORS: Did you have to go to court at all? If so –) How well do you feel the court process is conducted?
• Are the courts congested?
• To what extent do you feel that the Judges hold the required expertise?

ALL EXCLUDING CREDITORS’ PETITION DEBTORS

• How easy or difficult is it to pursue out of court procedures?

ALL

• To what extent do you feel the regime maximises recovery for creditors- that is making sure that the maximum value is obtained for assets and estates? [If IP; this applies to both corporate or natural person procedures]
• Why do you say that?

ALL

• To what extent (DEBTORS: did you; IPs: do you) were digital tools and resources in the insolvency procedure(s) available? [If IP; this applies to both corporate or natural person procedures]
• Did you use these tools at all?

[IF YES]

• Can you tell me more about these tools and how they were used?
• Do/did they reduce cost?
• Do/did they reduce time?
• Any room for improvements?

IPS ONLY

• To what extent would you say the Insolvency regime is predictable and intuitive for people who have experience with insolvency? [If IP; this applies to both corporate or natural person procedures]
• What makes you say that?

IPS AND ASK IF DEBTOR FEELS AWARE AND ABLE TO COMMENT ON THE ROLE OF THE REGIME IN PROMOTING ECONOMIC STABILITY - IF NOT, RECORD A “DON’T KNOW” RESPONSE

• To what extent would you say the Insolvency regime helps promote economic stability and growth across the UK? [this applies to both corporate or natural person procedures]
• [If IP; for natural person procedures] Does it give people a fresh start and help them to get back on their feet?
• [If IP; for natural person procedures] Do you think it helps encourage and facilitate entrepreneurialism?

• [If IP; for corporate procedures] Do you think it helps increase the productivity of firms?

• 1## Perceptions of effectiveness (10 mins)

IPS ONLY

• In your view, to what extent does the regime achieve its aim of balancing the needs of all stakeholders? [this applies to both corporate or natural person procedures]
• IN RELATION TO NATURAL PERSON PROCEDURES
• How, if at all, does the regime support those individuals in financial distress whilst balancing the interests of creditors?
• IN RELATION TO CORPORATE PROCEDURES
• How, if at all, does the regime respect the interest of employees?
• How, if at all, does the regime support the objective of keeping more employees in their jobs?
• How, if at all, does the regime achieve its aim of balancing the need for business rescue with the need to maximise returns for creditors?

IPS ONLY

• Does the regime meet the needs of SMEs? [this applies to both corporate or natural person (e.g. where an SME may be a creditor) procedures]
• Does the regime minimise burden on business?
• How can the burden for SMEs be further minimised?
  • Are there simplified insolvency processes with fewer formalities, shorter deadlines and lower costs that may be beneficial for smaller businesses?
  • What is the availability of practical online documentation templates and checklists?

IPS ONLY

• How well does the regime help viable companies to survive? [this applies to corporate insolvency only]
• How can this be improved?
• Does the regime facilitate the continuation of the debtor’s day-to-day operations during a reorganisation procedure?

IPS ONLY

• How well does the regime enable non-viable companies to a smooth and timely exit? [this applies to corporate insolvency only]
• Does the regime facilitate saving the viable parts of businesses, where the company as a whole cannot be saved?

IPS ONLY

• How well do you feel the regime supports the interests of creditors? [this applies to both corporate or natural person insolvency]
• Does the regime maximise returns to creditors?

IPS ONLY

• How well do you feel the regime enables the equitable treatment of creditors? [this applies to both corporate or natural person insolvency]
• Does the regime protect the rights of minority creditors?
• Does it properly balance the needs of different groups (e.g. employees, trade creditors, landlords)?

IPS ONLY

• How does the current insolvency system affect investment decision making? [this applies to both corporate or natural person insolvency]

IPS ONLY

• How well does the process incentivise stakeholder participation in proceedings? [this applies to both corporate or natural person insolvency]
• How well does the regime prevent stakeholders from undermining the insolvency process?

ALL

• How well does the regime ensure that those who can pay, will pay? [this applies to natural person insolvency]

DEBTORS ONLY

• In your view, how well does the regime help people in financial distress?

DEBTORS ONLY

I would like to ask you a few questions around the impact that going through insolvency proceedings has had on you. If you do not feel comfortable discussing this for any reason, I just want to remind you that your participation is entirely voluntary and you may skip these questions if you feel unable to answer them.

• Since your insolvency process, how easy or difficult has it been for you to make a fresh start?
• How has it affected your financial well-being?
  • Have your costs of living gone up after insolvency such as through increased need for deposits or unfavourable contracts for utilities? How significantly?
  • Do you think anything could have been done differently that would have enabled you to be in a better financial position now?
• How did the insolvency process affect your overall wellbeing?
  • Could anything have been done differently to minimise the impact on your wellbeing?
• Have you experienced any wider health impacts as a result of the insolvency process?
  • How could these be avoided in future?
• How well has the process enabled you to move forward?
  • Why do you say that?

ALL

• Do you feel there is stigma around certain insolvency procedures? [IF IP; this applies to both corporate or natural person insolvency] [IF DEBTORS; this applies to both insolvency as a whole and to the specific insolvency proceedings they went through]
• [IF IPS] Does this differ depending on the insolvency procedure in question?
• How does the regime help to reduce stigma around insolvency if at all?
• How well is the regime and system set-up to help people in financial distress/unfortunate positions to seek help?

DEBTORS ONLY

• Has the experience of the regime had any impact on people around you?

ALL

• To what extent do you feel the regime is transparent? [IF IP; this applies to both corporate or natural person insolvency]
• DEBTORS EXCLUDING CREDITORS’ PETITION DEBTORS: Did you understand what was happening at the time?
• CREDITORS’ PETITION DEBTORS: Did you understand why your creditors lodged a petition with the court against you? Did you understand the implications of this?
• Do you feel this could be improved? How?
• Do you feel levels of transparency vary for different interested parties?

ALL

• To what extent do you think that the regime effectively contributes to rehabilitation and preventing future insolvency? [IF IP; this applies to both corporate or natural person insolvency and rehabilitation]
• Why do you say that?
• Do you feel there can be improvements to existing education and guidance to ensure that relevant stakeholders can avoid insolvency in future?
• What else could be done to prevent future insolvency?
• [FOR IPs] How could the rehabilitation of corporate and natural persons be improved?
• [FOR DEBTORS] Thinking about your own experiences, what do you think would help you to avoid future insolvency procedures?

15. World Leading (5 mins)

ALL

• How, if at all, could the insolvency and enforcement regime be improved? [IF IP; this applies to both corporate or natural person insolvency]
• What would you change about the regime if you could?

IPS ONLY

• To what extent would you consider the insolvency regime to be innovative or forward thinking? [this applies to both corporate or natural person insolvency]
• Why?
• Are there any opportunities for innovation which you believe could help The Insolvency Service deliver for its stakeholders?

IPS ONLY

• When regulations are drafted /the regime is changed, to what extent are all stakeholders / parties consulted? [this applies to both corporate or natural person insolvency]

IPS ONLY

• And thinking now about international comparisons, how do you think the UK insolvency regime compares to other regimes? [this applies to both corporate or natural person insolvency]

IPS ONLY

• Would you consider the UK to be at the forefront of global standards and practices?

IPS ONLY

• What insolvency or enforcement regimes, if any, stand out as exemplary? [this applies to both corporate or natural person insolvency]
• Why?
• What, or how, could The Insolvency Service learn from this example?

IPS ONLY

• How does the regime perform on cross-border insolvency? [this applies to corporate insolvency]
• Why do you say that?

• How could this be improved?

• 1## Confidence in regime (5 mins)

ALL

• Having now discussed in depth different aspects of the insolvency and enforcement regime , can you tell me if your confidence in the insolvency regime has changed?
• On a scale of 1-10 with 10 being very confident and 1 being not at all confident how confident would you say you are in the insolvency regime?
• Why do you say this?
• What underpins your view?
  • Fairness?
  • Efficiency?
  • Effectiveness?
  • World beating?

ALL

• Having now discussed in depth different aspects of the insolvency and enforcement regime, can you tell me if your confidence in the enforcement regime has changed?
• On a scale of 1-10 with 10 being very confident and 1 being not at all confident how confident would you say you are in the enforcement regime?
• Why do you say this?
• What underpins your view?
  • Fairness?
  • Efficiency?
  • Effectiveness?
  • World beating?

16. Conclusion and thanks (2 mins)

ALL

• Thank you for your time so far. Before we finish, do you have any other comments that you would like to add about what we’ve discussed today?

ALL

• Would you be willing for us to call you back if we need to clarify any of the information you have provided today…?

Yes	1
No	2

ALL

• Would you be willing for us to use quotations from this discussion? These would be included in any reporting on an anonymised basis, so you won’t be identifiable to The Insolvency Service from what you say.

Yes	1
No	2

ALL

• Just to confirm, we’ll be keeping your confidential responses to the interview for analysis purposes and if you’d like a copy of your data, to change your data or for your data to be deleted then please get in contact with IFF Research on Insolvencyregimeconfidence@iffresearch.com or on 020 7250 3035

I declare that this survey has been carried out under IFF instructions and within the rules of the MRS Code of Conduct.

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