I completely accept that if the PPI had not been mis-sold in the first place, then some people may not have needed to revert to a debt solution at all - although I suspect that this would be rare in most cases. Not sure I understand nickjohn's point about wages and bonuses paid out, however, can you clarify the point you are making please?
Turning next to the relationship between IP and creditors - I can of course only speak for my own experience and direction provided to the people who work for me. Clients are made aware of the IPs duties very clearly, both in our meetings, subsequent discussions and the proposal documents themselves. I do not think that there can be any grounds for misunderstandings therefore. The role of the IP is not to take sides at any time in the process, but to realise the assets bound under the terms of the IVA and pay those proceeds over to creditors who have agreed to write off, often substantial, sums of money - from people who originally started out with the full intention of repaying their debts (or so I assume).
The reason that IP's are using claims management firms, is that we are not licenced not are we experienced to carry out the sort of investigations required under the legislation. In my own case this is in no way motivated by earning commission from such companies - I have never earned a penny from commission for referring clients in my whole professional life, and do not intend to start doing so now. The use of a claims company is to facilitate the process for my clients, not make it difficult. My clients are all provided with the opportunity of pursuing their claims directly, should they so wish, but many tell me that they do not want the hassle of this nor would know how to go about it. Others have successfully made their claims, and happily accounted to me for the monies received and in these cases creditors have received a larger share. The use of claims management companies is, however, supported by the majority of creditors for the reasons stated above.
It is correct that these days most insolvency practitioners are paid on the basis of a percentage of monies realised, with the prior agreement of our clients and the creditors. I feel that any suggestion that IPs are undertaking the exploration of PPI claims deliberately as a way of earning extra money is pretty insulting and misguided. I think that most of us involved in the process currently probably wish the words PPI had never been breathed, as well as VAT for that matter.
It is not our choice that we are forced to be paid on the basis of a percentage of realisatons - this is the making of creditors themselves. Our fee income has been drastically cut over the last few years, to a level when I often wonder why I continue to remain involved in this area of insolvency. I personally favour the setting of fixed fees or fees based on time properly spent - this is the way we are generally remunerated in every other area of insolvency in which we practice, and would at least remove the constant bickering about IP motivation on this forum and no doubt other popular discussion points.
Regards, Melanie Giles, Insolvency Practitioner
