Fees paid to insolvency lawyers are set to come under scrutiny by the Office of Fair Trading after the competition watchdog launched a probe into corporate insolvency.

The City of London Law Society’s insolvency committee was due to convene to discuss the OFT’s market study as the Gazette went to press. The OFT launched the study last week because of government concerns about the fees charged by insolvency practitioners in accountancy firms, law firms and other insolvency practices.

Peter Manning, partner and head of the London corporate recovery and restructuring practice at City firm Simmons & Simmons, said that while lawyers’ fees could be drawn into the debate, there are ‘more things under the radar’ when it comes to the ‘headline’ issue of fees.

‘When an insolvency practitioner is originally hired by a bank, they normally work at the bank’s panel rates, which are often pretty reasonable,’ he said. ‘General creditors are less interested in constraining [advisers’] rates, which can result in huge bills.’Clive Maxwell, OFT senior director of services, said: ‘We want to identify any potential problems within the corporate insolvency market to ensure that firms and practitioners are competing freely and that the market is working well for the end consumers.’

PricewaterhouseCoopers, one of the Big Four accountants, has reportedly earned more than £150m as administrator of the European arm of collapsed investment bank Lehman ­Brothers.

The OFT expects to complete the study by the end of 2010. Submissions can be sent to the OFT’s Salisbury Square office or emailed to corporateinsolvency@oft.gsi.gov.uk.