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Insolvency law is being used as a license to defraud – the sector is unregulated and unaccountable

Insolvency investigations and strategic advice

The insolvency sector is entirely unregulated and its practitioners, for the most part, see administration of the insolvent estate as a license to print money. The legal framework, being the Insolvency Act 1986 and the Insolvency Rules 2016 is comprehensive, however, those tasked with administering the laws in practice, fail to do so.

The principal duty of the fiduciary trustee in insolvency, both corporate and individual is to act at all times in the interests of the body of creditors and the estate generally to recover assets belonging to the estate, to investigate the affairs of the insolvent estate in the public interest and to realise assets belonging to the estate at fair value, distributing a dividend to the legitimate creditors to minimise loss incurred through the insolvency. Any surplus, after payment of the legitimately incurred trustee costs in administration of the estate is distributed to the contributories / members or the bankrupt.

A trustee / liquidator has a duty to act with a high degree of care and skill and must maintain his / her independence and impartiality at all times. The renowned authority in Keech v Sandford [1726] EWHC J76, derives from trust law, on the fiduciary duty of loyalty and independence Lord Macclesfield had previously held that a fiduciary trustee was entitled to take money from a trust, invest it on their own behalf, and keep the profit, if they restored money to the trust.  Keech reversed that, and ever since the rule of law internationally has maintained a strict opposition to any possibility of a conflict of interest. The two lead authorities arise from the judgment: 

 A trustee may not profiteer from his trusteeship whatsoever; 

– A trustee owes a strict duty of loyalty so that there can never be a possibility of any conflict of interest.

It is our view, after dozens of cases we have investigated, that the Insolvency Service, the industry’s only regulator is rotten to the core with corrupt practices and members who work covertly to assist unscrupulous lawyers and private insolvency practitioners (“IP”) in abusing the legislation to make often disproportionate gains through the administration of the role of the fiduciary trustee. The conduct is unlawful and yet scrutiny of the fees being applied by the IP is often made beyond reach of those affected by the insolvency, including creditors. There is a need to encourage and advocate transparency and to investigate the sector has a whole. Without an independent regulator that operates with integrity, the sector has become a law unto itself and the courts support and are are generally biased in favour of the IP, who acts as an affectual officer of the court in administration of their role. They are given far too much power, with absolutely no regulation or come back, so the abuse prevails.

Insolvency fraud investigator
Insolvency is daunting, but there are options, choose your path wisely

Insolvency investigation services

Intelligence UK has broad experience in investigating complex and high profile corporate and personal insolvency cases. We have forged long term mutually beneficial relationships with leading counsel associates who synergise perfectly with our investigatory strategy. We have the capability to privately prosecute, both in the civil courts and criminally where there is misconduct on the part of insolvency office holders.

We specialise in asset recovery, often achieving results for creditors where insolvency practitioners have failed through either lack of willing or inability.

Get in touch with us today to find out how we may be able to help. Simply email us with your enquiry to info@intelligenceuk.com.

Preserving the creditor’s position & asset recovery

Our extensive experience of fraud investigation, asset-tracing and specialisation in insolvency law enables us to provide expert assistance, acting fast, getting to the root of the issues, reducing costs and delays for our clients whilst maximising the chances of securing evidence and recovering assets.

Often there is a way out and most often, we have found that there are ways of getting back into control. Sometimes the boundary to achieving success is a conflicting position or motive between a creditor and the insolvency practitioner.

We apply our forensic minds and substantial knowledge of the sector to create and execute the strategy. We create court ready reports for lawyers and the clients we work with directly, saving substantially on time and money by getting to the heart of the issues, delivering successful outcomes and consolidating the arguments to perfect litigation strategy.

The first step towards getting somewhere is to decide you’re not going to stay where you are.

– J.P Morgan

Insolvency law is widely being used as the vehicle of choice for white collar criminals in defrauding their victims. Whether by taking away standing to bring litigation by misuse of insolvency legislation or whether by using insolvency and fictitious claims and misapplied, often accentuated fees, we have identified a massive problem in the insolvency sector and there is urgent need of reform.

With an in-depth understanding of cross-disciplinary best practices, Intelligence UK is inter-connected across jurisdictions and regulatory fronts, enabling us to carry out multi-jurisdictional investigations and hit issues head on wherever they arise.




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