A revised ethical code for insolvency practitioners
19 March 2006
The current Insolvency Ethical Guide was introduced in January 2004 as a standardised Guide for all insolvency practitioners, regardless of their authorising body.
The Joint Insolvency Committee (JIC) has recently undertaken an extensive review of the Guide and comments are now invited on the outcome of its work, a revised Insolvency Code of Ethics. The revised code is based in part on the ethical framework applied by accounting bodies. You can download the Insolvency Code of Ethics from this page (see 'related documents').
Ultimately, the JIC will recommend a revised version of the Code to all of the authorising bodies for adoption. If the JIC's recommendation is accepted, all insolvency practitioners will continue to follow a standardised Code, regardless of their authorising body.
The current Insolvency Ethical Guide provides insolvency practitioners with five principles to which insolvency practitioners must adhere, together with a list of common situations which insolvency practitioners may face.
The revised Code also includes five principles which have been revised from the previous Guide and the new Code provides more detail concerning the threats that insolvency practitioners may face in the conduct of their work.
The earlier Guide discussed two main types of threat, self interest and self review, whilst the new Code also includes advocacy, familiarity and intimidation. Information is also included on potential safeguards.
The Code contains examples of generic issues faced by an insolvency practitioner and also particular situations that may occur. Many of these particular examples have been carried forward from the existing Guide, as the JIC believes that these are still relevant.
The Code is presented as a new document because the extent of the changes makes it impractical to issue a version highlighting the changes from the existing Guide. However, the JIC does not regard the revised Code as substantially different to the existing Guide and that it constitutes what most practitioners are already doing as good practice.
JIC are interested in your views on the draft Code. You can download the pro-forma response form from this page (see 'related documents').
In order that any comments you may have can be given full consideration as part of the development of the Code, please make sure they are sent to the secretary of the Joint Insolvency Committee by 2 July 2007.