The Insolvency Service has launched a consultation on reforms to the regulation of licensed insolvency practitioners (IPs). The two headline proposals are: (1) Increased minimum bonding — the current minimum bond (insurance protecting creditors against IP misconduct or default) is proposed to increase from £250,000 to £1 million for most appointments, with higher levels for large administrations and liquidations. (2) Standardised fee disclosure — IPs would be required to provide a standardised "fee estimate document" at the point of appointment, setting out the estimated basis of fees (time costs, percentage of realisations, or fixed fee), the hourly rates of all fee-earners, and the estimated range of total fees.
Currently, creditors — who often have no practical influence over the choice of IP — complain that fees are disclosed only after they become high. The Insolvency Service also proposes a new complaint mechanism: creditors could escalate fee disputes directly to the recognised professional body (RPB) that licenses the IP, with a streamlined 60-day resolution target. The consultation closes 31 January 2027.
If you are a creditor in an active insolvency and concerned about IP fees, you already have rights: you can request fee information from the IP, require a creditors' committee to be established (if there are enough creditors), and challenge fees through the RPB or the court. See the winding-up glossary entry and the insolvency rights article.