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cemetery, and which had been formed in
the 19th Century, could no longer manage
its affairs and Giles was appointed as
sole liquidator. The cemetery – around 34
acres in the middle of Plymouth – included
graves of those lost in the Titanic disaster
as well as a number of war dead, and not
surprisingly there was huge public interest.
Giles found himself stuck between a rock
(or should that be tombstone?) and the
proverbial hard place:
“My duty was to get the best return
for the creditors,” he says, “but this was
against a particularly horrendous context.
The possibility of having to exhume graves
to prepare the site for sale was not a
pleasant one and the Section 98 meeting
at the Ford Park Cemetery Chapel was
particularly well attended.”
Happily for Giles, and the relatives of
the deceased, the cost of clearing the site
outweighed the cost of the land, making it
financially worthless. “We were therefore
able to ‘disclaim’ it,” Giles explains, “and
the cemetery passed into the hands of a
local Trust that had been set up especially
for the purpose.”
It was a classic case of the IP being
the messenger, although in this case there
was a satisfactory outcome. But there are
plenty of other occasions in which IPs find
themselves in the firing line, accused of
charging disproportionate fees or being
insensitive to directors of failed or failing
businesses. As Giles explains, however,
IPs have to deal with the certainty of an
uncertain world:
“Things can easily go wrong for the
IP,” he says, “such as when assets (and
especially the debtor book) appear to have
a value but are in fact worthless, or when
stock that appears to have no ownership
or retention of title seems to evaporate in
front of your eyes. IPs can spend much time
and energy chasing shadows through no
fault of their own for issues that they cannot
possibly have foreseen, and these are nearly
always costs that have to be written off.”
Then, Giles says, there are hostile
directors and debtors: “Difficult or so-called
‘hostile’ bankrupts can cause all sorts of
trouble and make outrageous allegations
that are difficult to take,” he says, “but the
IP has to grin and bear it.”
Impeccable credentials
Giles’ credentials for championing
the cause of IPs are impeccable.
Notwithstanding his experience, Giles
has also been at various times the
accounting member of the Insolvency Rules
Committee, an examiner for the personal
insolvency paper of the Joint Insolvency
Examination Board (JIEB), and chairman
of the Insolvency Licensing Committee of
the ICAEW. He is a co-editor of Individual
Voluntary Arrangements published by
Jordans.
He is also, perhaps most importantly,
the current serving President of R3,
the Association of Business Recovery
Professionals. As such he has intimate
knowledge of the ongoing work his
association is doing to represent its
members, often in the case of severe
prejudice. He tackles the issue of fees
head on: “Justifying your fees is a constant
challenge in any profession,” he continues.
“It is not something that is unique to our
industry. But the Government has now
accepted that a cost/time model is the best
way forward, as opposed to a percentage
of realisations or a fixed fee. This helps IPs
to deal with the unknown, and is probably
the fairest way of charging. It is also, I
believe, a pretty good measure of value.
“Estimates are a good idea,” he adds.
“Of course they aren’t perfect, but they do
give the IP an opportunity to go back to
the client after their initial investigation and
revise the estimate accordingly.”
Giles contests that while fees tend to hit
the headlines, the number of complaints in
relation to IP fees is minimal, and certainly
disproportionate to the media attention
they attract. So too the issue of Pre-Packs:
“When Teresa Graham went on record as
saying that Pre-Packs were a good thing,
that was a major advance,” he says.
He believes also that the idea of a
‘pool’ of senior business professionals who
judge whether the sale of a business to a
‘connected party’ is fair and reasonable is
at least one that demands (and is receiving)
closer scrutiny.
The Government has been especially
active in reviewing the insolvency regime
in recent years and all parties, the
Government, the Insolvency Service, the
IPs, creditors and debtors see the value in
ensuring that the process is as easy and
as streamlined as possible. Few would
argue, for example, with the greater use of
technology to facilitate meetings, but these
should not be at the expense, Giles argues,
of the IPs' right to call a creditors’ meeting
In 2012, IPs helped rescue 6,100
businesses and helped save
750,000 jobs (ComRes/R3 survey).
There are currently around 1,700
insolvency practitioners in the
UK, of whom around 1,300 take
appointments
Since 2010, the insolvency
profession has had to respond to
more than 20 pieces of legislation
or government reviews.
in person when the need arises: “We would
not want to see this power removed,”
he says. “Face-to-face meetings can be
incredibly useful to question the directors
or debtor in person and to collect and share
information with creditors in a way that is
just not possible otherwise.”
The Small Business, Enterprise and
Employment Bill, Giles says, includes many
sensible and worthwhile provisions such
as a proposal to extend administrations:
“That’s a good thing,” he explains. “We
would have liked to have seen no limit to
the life of an administration, but adding
six months to the extra time period which
can be approved by creditors will cover
the vast majority of cases that need to be
extended.”
Jackson has, of course, been a key
focus for R3 and the Ministry of Justice only
very recently backed down on its proposal
to remove the exemption for insolvency
litigation from the Legal Aid, Sentencing,
and Punishment of Offenders Act. It will
look at the issue again later in the year.
The evidence, Giles suggests, points to
the permanent exemption for insolvency
litigation as being a good thing,: “Our
members want creditors to get a return,”
Giles stresses. “It demonstrates that we
have done our job properly, and this is
especially so in litigation-type cases.”
It is the one blot on an otherwise
encouragingly sunny landscape.
Certainly there are other issues currently
in R3’s sights, including the challenge
of Super Priority Funding, Collective
Redundancies and moratoria. Its recent
Personal Insolvency Landscape paper was
particularly well received and it would like to
see a full review of the personal insolvency
regime. It has also developed, with the
support of the CICM, a new website to
guide creditors through the insolvency
process (see news page 7).
Since November 2014 Giles and his
colleagues have between them met with
30 different parliamentarians and the work
continues: “It’s fair to say that R3 has been
enormously busy, but we have made real
progress and can point to tangible results,”
he says.
So does he still have time for his music?
The violin has been (largely) put back in its
case, though Giles still finds the time to sing
in several different choirs: “On a good day,
my top ‘A’s’ are still acceptable,” he laughs.
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