ASIC's approach to insolvency practitioner remuneration
A speech by Professor Berna Collier, ASIC Commissioner, to the Queensland Law Society and Insolvency Practitioners Association of Australia, August 2005
Good morning and thank you for inviting me here to give ASIC's current thinking on remuneration issues.
Recently, and especially following the Stockford decision, there has been many a published word on the subject of fees paid to insolvency practitioners.
Previously there have been public inquiries including the Companies and Securities Advisory Committee Corporate Voluntary Administrations (1998); Parliamentary Joint Committee on Corporations and Financial Services, Corporate Insolvency Laws: A Stocktake (2004) and Companies and Markets Advisory Committee, Rehabilitating large and complex enterprises in financial difficulties (2004).
The Joint Committee recommended that ASIC work with the professional bodies to encourage the promotion of best practice standards in remuneration charging and in particular the provision of adequate disclosure of the basis of fees charged by insolvency practitioners and on a timelier basis. We are doing this with our proposed Remuneration Guide.
The Committee recommended that a court should have the power to review the remuneration of administrators and deed administrators on the application of ASIC.
Law reform proposals are with Treasury and we are expecting an announcement soon.
As you know, the Corporations Act does not prescribe remuneration levels. It encourages administrators and creditors to reach agreement between them. Since July 2000, the IPAA ceased using your guide to hourly rates and scales and now charge rates in accordance with your own internal cost structures having regard to the complexity and demands of each appointment.