Guidance

Making a complaint about an insolvency practitioner's Recognised Professional Body (RPB)

Published 18 July 2024

This Policy sets out the circumstances and way in which the Insolvency Service will investigate complaints about the way a Recognised Professional Body (RPB) has dealt with a complaint about an Insolvency Practitioner.

IPRS regulations and functions

Insolvency Practitioner Regulation Section (IPRS) exercises the Secretary of State’s functions as the “oversight regulator” for the Insolvency Practitioners as set out in Part XIII of the Insolvency Act 1986 (the Act). RPBs authorise and regulate individual Insolvency Practitioners.  IPRS regulates the RPBs. It is the RPBs who decide on an Insolvency Practitioners’ conduct.

In regulating the RPBs, IPRS is governed by the Act, the Regulatory Principles, the Regulators’ Code and the Growth duty.  These can be found here Insolvency Act 1986 (legislation.gov.uk), Regulators’ Code - GOV.UK (www.gov.uk), Growth duty - GOV.UK (www.gov.uk).

The Regulatory Principles are incorporated into the Act.  When exercising its functions, IPRS must have regard to the regulatory objectives as set out in s.391C of the Act. When discharging their regulatory functions, the RPBs must act in a way which is compatible with those regulatory objectives and which they consider to be most appropriate whilst enjoying discretion as to how they achieve compatibility.[1]

IPRS main role

The RPBs’ functions include the consideration of complaints about Insolvency Practitioners, and they have published procedures as to how they will carry out that function. The role of IPRS is to ensure that those procedures are followed and that in their role as regulator the RPBs have acted in accordance with the requirements described above when considering complaints.

Each RPB will have internal mechanisms for review of complaints; and for the consideration of regulatory or disciplinary action to be made by their independent committees following this. In limited circumstances, a complaint matter may be referred to an Independent Reviewer at the request of the complainant. 

When to make a complaint?

If, having made a complaint about an Insolvency Practitioner to an RPB and having exhausted their processes, a complainant believes there has been a serious failure to follow its procedures, they can make a complaint to IPRS for consideration. IPRS will not consider cases where the complainant simply disagrees with the outcome of the RPB’s consideration of the case.

The RPBs will also have regular interactions with other Insolvency Practitioners or other sector stakeholders, who may also wish to make a complaint. These will be considered on the same basis as those which originate from complaints against Insolvency Practitioners.

What outcome to expect if a complaint is upheld?

It is important to note that not every complaint will result in disciplinary action. Sometimes a complaint may indicate misconduct, but on occasion, it may simply provide valuable information to regulatory bodies such as RPBs and IPRS. This information can be used to evaluate risk and improve regulatory approaches. IPRS welcomes the reporting of such information as it can help identify areas where lessons can be learned, and improvements can be made.

Personal Insolvency is devolved to Scotland and therefore if a complainant wishes to make a complaint about an RPBs consideration in the case of a sequestration then they should first approach the Accountant in Bankruptcy.

How to make a complaint to IPRS

A complaint should:

• identify the Insolvency Practitioner
• identify the case in which the Insolvency Practitioner acted
• identify the RPB
• identify the way(s) in which they consider the RPB has failed to follow its own processes
• have a copy of the original complaint attached to the RPB and any appeals or escalations to the RPB
• have a copy of the RPB’s letter(s) attached, setting out their decision(s) in relation to the complaint
• confirm that they have exhausted all appeals and escalations at the RPB
• explain what the RPB has done or not done that is being complained about

What can IPRS do?

IPRS’ role is to consider whether the RPB has complied with its procedures in accordance with the regulatory objectives as explained above. This includes the quality of work undertaken. This process may result in recommendations to the RPB for potential changes to process, training, or other important lessons to be learned.

A complaint about an RPB is not a route of appeal against an outcome of a complaint or about an Insolvency Practitioner.

IPRS can:

• decide whether to investigate a complaint
• upon investigation decide whether to make recommendations to the RPB
• after deciding on whether to make recommendation, support the RPB to implement any changes
• ask an RPB to consider a new head of complaint, or another relevant matter if that could amount to disciplinary action and has not previously been considered
• meet this requirement there would need to be new, unseen evidence, and/or allegations which have not been considered by the RPB

IPRS cannot:

• recommend the reopening of a complaint against an Insolvency Practitioner because a complainant is unhappy with the outcome
• overturn or change the decision of an independent committee of the RPB
• instruct the Insolvency Practitioner to take a particular course of action or overturn a decision they have made whilst in office

It is also important to know that this process does not include any mechanism for compensation from the Insolvency Practitioner or the RPB, and IPRS cannot order that compensation be made available to the complainant. For compensation and/or challenging an act of an Insolvency Practitioner the correct route of potential recourse is the Court. The Court will consider the facts of the case and, if appropriate in the circumstances, may confirm, reverse or modify any decisions of an Insolvency Practitioner appointed on a case.

What IPRS can consider?

IPRS will establish the basis of the complaint against the RPB and summarise the concerns of the complainant.

IPRS may consider:

• whether an RPB has followed the correct processes in accordance with their own published guidance
• if the RPB has fully assessed and, if appropriate investigated all heads of complaint and/or explained the reasons the RPB has chosen not to carry out a full investigate a particular complaint
• any behaviour by the RPB either verbally or written which might be considered inappropriate
• whether the RPB has adhered to the regulatory objectives in the required manner when discharging their regulatory function, for example, not allowing access to certain procedures which should have been open to the complainant
• whether the RPB has had regard for the regulatory objectives when conducting investigations. For example, consideration of all available evidence provided by a complainant, and posing sufficient challenge to an Insolvency Practitioner’s response where evidence contradicts the explanation
• whether the RPB’s independent committee in considering the merits of the case has had access to the information

IPRS cannot consider:

• whether the outcome of the complaint by any independent committee was correct and/or comment on the reasons for the decision. Instead, the relevant appeal processes should be used
• whether the complainant should make any Court applications because of an outcome from the RPB
• cases which were rejected on the basis that the correct route for the Complainant was a Court application
• whether an RPB should have progressed all/some allegations to investigation. All RPBs have a procedure whereby the complainant can ask an independent committee to consider that decision

When IPRS receive the complaint how will we identify complaint issues?

IPRS will first consider the complaint about the RPB and may ask the complainant further questions, to clarify and set out clearly the issues which cover the concerns raised.

IPRS will establish whether the complainant has concluded all relevant appeal processes within the RPB.

IPRS may ask for evidence to support a complaint, for example, email exchanges between the complainant and the RPB or copies of letters. IPRS will not open an investigation simply if a complainant makes a claim which has no basis or supporting evidence. IPRS will not generally review a complaint if the request is due to a complainant missing the deadline for review of their complaint by the RPB.

How will IPRS determine if the complaint should be investigated?

IPRS will assign a case officer/case handler.  who will review the information provided by the complainant to determine:

• whether the complaint is about actions of an RPB (and not, for example, about a third-party organisation)
• whether the complaint is within our remit
• whether an investigation should be opened

If IPRS makes a request for further information from a complainant and no response is received and IPRS is unable to progress the complaint without it, a follow up request for that information will be sent with a fourteen-day deadline for response. If this is not forthcoming IPRS will close the complaint.

What happens if the complaint is investigated?  

The complainant will receive a letter explaining whether IPRS intends to progress their complaint to investigation or not.

If the complaint is accepted for investigation by IPRS, the complainant will receive a letter setting out its understanding of the complainant’s concerns and confirming that IPRS will consider the complaint and carry out an investigation.

If IPRS has decided not to investigate the complaint, the reasons for its decision will be explained.

However, if the complainant has concerns that a member of Insolvency Service staff has not provided an appropriate level of service, then they may refer their case to our central complaints team in line with this guidance.

How long will the investigation take?

Once accepted, the complainant can expect a response, in most cases, within three months. However, this may be longer in exceptional circumstances, and if that is the case this will be confirmed in writing by IPRS.

The three months will begin from the date the complainant receives the letter of acceptance.

The investigation process

How IRPS will obtain information

IPRS will engage with the relevant RPB and obtain information relating to the complainant’s case, this may include but is not limited to:

• correspondence between the complainant and the RPB
• correspondence between the RPB and the Insolvency Practitioner
• case file notes, investigation papers and reports
• committee minutes

IPRS will not interview the Insolvency Practitioner, RPB or complainant or make enquiries of third parties.

How IPRS will review information

When reviewing the information obtained, IPRS will consider some or all the following:

• whether the complainant has been made aware of the RPB’s complaint process or signposted to where they can find information on that process
• whether the RPB applied the correct process to the complaint and gave the complainant access to all potential rights of appeal based on their published policy
• whether the RPB provided responses to all heads of complaint with clear, easy to understand explanations
• if all correspondence received was replied to in a timely manner and the complainant was kept apprised of progress of the case in compliance with the RPBs own published procedures and response times
• if all appropriate/adequate requests in accordance with the RPB’s relevant procedures have been made of the Insolvency Practitioner to obtain evidence to determine the circumstances of the complaint and help make an informed decision on whether misconduct is present
• whether the RPB asked appropriate questions to clarify the circumstances.
• whether the RPB has acted promptly if the Insolvency Practitioner has been uncooperative during the investigation
• whether the RPB has had regard for the regulatory objectives when carrying out the investigatory work, drafting any reports and corresponding with both the Insolvency Practitioner and complainant

The outcome process

How IPRS will check facts with the RPB

Once the investigation of the complaint has concluded, IPRS will share a draft letter intended for the complainant with the relevant RPB, this may include recommendations. This is for a factual check to ensure IPRS has understood the documents and set out the correct timeline of events. The RPB will not be asked to comment on the outcome decision but will be engaged in the process of acceptance and implementation of any recommendations deemed appropriate.   

If IPRS identifies that any changes to procedure are required to meet regulatory objectives, it may make recommendations. These will be provided directly to the RPB via letter with a deadline for implementation. Only recommendations which can be implemented by RPBs based on their bye laws will be made. The recommendations will not be made public.

How complainant will receive the outcome

IPRS will send an outcome letter to the complainant detailing any findings and if appropriate any recommendations to the RPB.

IPRS aims to provide the complainant with a clear and objective account of what has happened, based on established facts, having reviewed the evidence from the RPB and the complainant.

If the complainant has questions or remains unsatisfied

If the complainant has questions which have not been covered in the outcome letter, IPRS will try, where possible to answer those. If the complainant is unhappy with the outcome, they can ask for a senior member of the team to review the conclusion reached. Beyond that, there is no further route of challenge.

If the complainant has a complaint about the service they have received they can complain to Insolvency.complaints@insolvency.gov.uk.  Complaints procedure - The Insolvency Service - GOV.UK (www.gov.uk). Thereafter, concerns may be flagged with the Parliamentary and Health Service Ombudsman. 

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[1] 391C(4)(a) IA 1986