Principles Governing the Fixing of Insolvency Practitioners’ Remuneration
EW Barker Centre for Law & Business Working Paper 20/09
23 Pages Posted: 17 Aug 2020
Date Written: August 14, 2020
Overcharging by insolvency practitioners is a problem which has invited legislative and judicial intervention in several commonwealth jurisdictions, and it continues to be a concern in many of them. Such regulation is justified because of the failure of unsecured creditors to effectively monitor and control the practitioner’s charges, leading to failure in the insolvency practitioners’ services market. However, the rules on the fixing of the practitioner’s remuneration are not always aligned with basic principles, and their applications can be challenging. From the vantage point that regulations should seek to combat market failure, this article elucidates the principles and rules that ought to apply in the fixing of insolvency practitioners’ remuneration. It analyses who ought to be empowered to set remuneration, the rules on disclosure, the meaning of the value of services rendered and the approaches of the courts in computing value, by reference to the laws of England, Singapore and Hong Kong SAR, and suggests reforms to make the rules consistent with the identified principles.
Keywords: Insolvency practitioners; liquidators; IP remuneration; liquidators’ remuneration; market failure
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