Insolvency code proposed

Guidelines are being finalised on matters such as transparency and confidentiality, with the results set to be unveiled later this year.

The Joint Insolvency Committee undertook an extensive review of the sector to create the code, to be released on 1 November.

The code will include issues of confidentiality and due diligence. Currently, IPs can clash with accountancy codes that place confidentiality as paramount. IPs, however, must place transparency as their priority to creditors when dealing with insolvent companies or bankrupts.

Brendan Guilfoyle, chairman of the ethics committee at the Insolvency Practitioner Association, said: ‘In accountancy confidentiality is imperative, but in the insolvency arena we have a responsibility to our client which is the creditors.’

‘The code refers to formal insolvency appointments. Practitioners should not hide behind the fundamental principle of confidentiality but be more transparent,’ he added.

Consultation with the Insolvency bodies ended in July 2007.

The IPA, along with the Insolvency Service is hoping to issue a foreword to be attached to the code, which is a revision of the current Insolvency Ethical Guide produced in January 2004.