Statements of Insolvency Practice (SIPs)
SIPs are issued to insolvency practitioners with a view to maintaining standards by setting out required practice and harmonising practitioners’ approach to particular aspects of insolvency. The purpose of SIPs is to outline basic principles and essential procedures with which insolvency practitioners are required to comply. Departure from the standards established in SIPs is a matter that may be taken into account in the event of disciplinary or regulatory action.
SIPs in relation to Republic of Ireland insolvencies are available on the website of the Institute of Chartered Accountants in Ireland – www.icai.ie
New SIP 9 FAQ resource
Following a Joint Insolvency Committee (JIC) consultation, changes were made to Statement of Insolvency Practice (SIP) 9 with effect from 1 April 2021.
The introduction of the revised SIP 9 has resulted in the Recognised Professional Bodies (RPBs) being asked a number of questions surrounding its practical operation.
ICAEW, IPA, CAI and ICAS have attempted to address these questions and provide their collective thoughts on the applied impact of the changes to SIP 9 in an FAQ document.
The queries cover a range of issues which have been broadly grouped into the following categories:
- Fixed costs
- Shared costs
- Overhead or case charges
- Transitional provisions
- The likely return
- Payments other than from the estate
- Other issues
There is additionally a small set of practical examples appended to the FAQ document.
Insolvency practitioners (IPs) should recognise that the SIPs are principles-based, and as such it is not possible to be prescriptive as to how the SIP will apply in individual circumstances. When considering fees and expenses, the SIP has been revised to address actual and perceived abuse; the over-riding principles are those set out in the SIP.
In particular, it is worth emphasising the principle that all payments from an estate should be fair and reasonable and proportionate to the insolvency appointment, as that is a principle that permeates through many of the answers.
It is hoped that the FAQ document will be of use to IPs in applying the revised SIP 9, the operation and application of which will be kept under review. The FAQ document is consequently being issued as a live working document and will be subject to periodic update and amendment if and when issues arise in practice.
Click here to view the document.