More transparency for fees charged in insolvency
New rules laid in parliament today will require insolvency practitioners to provide a summary of estimated costs, the work to be undertaken and, where an hourly rate is proposed, an estimate of the expected time.
Business Minister Jo Swinson said:
Insolvency practitioners do important and specialist work realising the assets of failed companies for distribution to suppliers and others owed money. Initial fee estimates, which can only be changed by agreement, will strengthen the position of those owed money to ensure that fees are fair and reasonable.
Increased transparency is a sensible and practical way to strengthen the hands of those owed money in an insolvency and will give insolvency practitioners the opportunity to demonstrate how their services provide value for money.
New rules laid in Parliament today require insolvency practitioners to provide a summary of estimated costs, the work to be undertaken and, where an hourly rate is proposed, an estimate of the expected time. These estimates will act as a cap on fees as, once agreed, they can only be changed by agreement between the insolvency practitioners and those that are owed money.
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