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The central problem with insolvency administration is the fee regime which IPs operate, with the acquiescence and probably the approval of the courts. I have recently received the report of an IP dealing with an insolvent company which owed me £500. When the winding up began the company had between £50,000 and £100,000 in cash but not much else. Creditors exceeded £300,000. The fees charged by the IP have swallowed up over 95% of the cash. Charging rates run from over £350 and hour for a senior practioner to £120 an hour for support (eg secretarial, administrative and book keeping) staff. Such a fee regime would not be tolerated in a firm of solicitors, support staff being part of the firm's overheads and thus subsumed into the hourly rate so far as the court is concerned.

The IP is based in a small town in a depressed part of the north of England so all office expenses are likely to be a lot lower than they would be in London, Birmingham, Manchester or any other big city and I expect the highest fees charged by the IPs neighbouring solicitors would be a lot less than the IPs highest rate and would include admin and support staff so no seperate charge would be made for their time.

If Jackson genuinely wanted to bring costs down for insolvency he might usefully have tacked this iniquity. The fact that he complains about his reforms not applying to insolvency without even a nod in the direction of the rapacious fees charged by IPs suggests that he is either indefensibly ignorant of the facts or indefensibly uninterested in the true state of affairs.

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