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6th December 2016

Unsung heroes in a changing world: What has the INSOLVENCY PROFESSION ever done for us, eh?!

6th December 2016

Unsung heroes in a changing world: What has the INSOLVENCY PROFESSION ever done for us, eh?!

Mike Pavitt

Posted: 6th December 2016

T: 023 8048 2275

E: Email Me

In this, my final blog before I take up the post of Southern Region Chair of R3 (the Association of Business Recovery Professionals) on 6 December, I take a very brief look back at some of the sweeping political and economic changes of the past 6 months, and a longer look forward to the challenges the UK insolvency profession will face in order to continue delivering a world class service in such a rapidly changing environment. Along the way, I may take a few of my accustomed diversions into the worlds of film, literature, media and stage – just to keep it interesting you understand, and for this you can partly blame Brian Blessed, whom I met last week (of which ore below) – but the serious theme of this blog is that it is high time UK Plc started to better appreciate the work of restructuring and insolvency professionals, because we are likely to need their services more often during these uncertain times.

For anyone reading this who is not a member of the insolvency profession, don’t worry – this will not be a Bremoaners’ pitch for a return to the ‘good old days’ of May 2016, still less a self-aggrandising love-in for IPs. None of us can deny the winds of change, and anyone who knows me will be aware that I am a realist and that I act at least as often for other stakeholders as I do for IPs. Indeed I have in the past been quite vocal in my criticism of certain practices which have crept into the way the profession works and which have needed to be addressed. I believe and hope, therefore, that I am capable of offering an unbiased, ‘outsider looking in’ perspective, and I shall make every effort consistent with my office to preserve that objectivity over the next 3 years as R3 Chair.

So, why am I seeking to label the insolvency profession as ‘unsung heroes’, and why I am running this blog against a backcloth of Branagh’s unsurpassed film version of Henry V? Well, I confess it wasn’t a phrase I would have thought to use until, seated in a radio studio being interviewed in September, the phrase was put to me by my interviewer, Xan Phillips, after I had just explained to his listeners what an insolvency practitioner does, and the circumstances in which they often work. My preferred analogy is the one where IPs act as the ‘Super Mario’ style plumbers of the economy, often doing the jobs nobody else would know how to approach, and keeping the system in working order and free of blockages. It is maybe a crude analogy, but it is effective. Still, the more I have thought about it over the weeks and months since, whilst working with IPs in a somewhat rarefied, post-Brexit, atmosphere, the more I have accepted that unsung heroes is precisely what IPs are.

Heroes: because IPs are always being called upon to head out, into the breach, more often than not at very short notice and frequently without all the necessary information to equip them, but they do so willingly and no matter how inconvenient it might be for whatever else they have on at the time.

Unsung: because if the press picks up an insolvency-related story, despite the best efforts of R3 and others to educate journalists, politicians and other thought leaders, 9 times out 10 the role of the IP is cast in a negative light, or they are vilified for charging a fee. I am ashamed to say that my fellow lawyers are, at times, amongst the most outspoken critics of IPs (you only have to follow the comments on the online version of the Law Society’s Gazette for a few weeks to see this); why they cannot see the hypocrisy in this when legal services are so often a distress purchase as well is beyond me. It possibly just comes down to the fact that there is a deep-seated, natural human aversion to people being seen to profit from adversity, but that frustration would be much better directed against the people and systems who caused the problem in the first place, rather than the rescue workers trying to reassemble the pieces, and to salvage the value for the benefit of all.

In the past few months alone, I have seen or been involved in literally dozens of examples of IPs dropping everything to tear out to a site to help, often investing a great deal of time in something which is as likely as not will not turn into a fee paying matter at all. I have had IPs jet off – pretty much at their own expense – to creditors’ meetings in Lancashire and Northern Ireland for our clients, and I have seen IPs throw in their evening plans at the drop of a hat, for example to try to help someone secure an urgent fire sale in the face of wholly inadequate information about the assets available for sale.

Even where IPs are formally appointed, theirs and their solicitors’ role is rarely fully appreciated, whether by the individuals involved or the creditors. Even very successful assignments, which result in the preservation of many jobs and a sizeable return to creditors seem to carry a strong expectation that the professionals involved will cap their fee and/or discount their perceived ‘rack rates’ in order to further enhance the return. All this is part and parcel of the insolvency profession (IPs and lawyers), which has to make you wonder sometimes about the character of those who seek the insolvency profession as a career: are they actually deranged, or perhaps – just perhaps – are they (at least in part) motivated by a desire to do some good, to make a difference?

All this consideration of what the public at large do not see, let alone have the tools to understand, puts me in mind of the scene in Monty Python’s Life of Brian, “what have the Romans ever done for us”, so well reconstructed this year by Patrick Stewart as “what has the European Convention on Human Rights ever done for us”.  If we take the time to stand back and list all the good work  the insolvency profession does for us, perhaps we will learn to appreciate it better.

Whatever our views on Brexit (and as I write the Supreme Court is starting to hear the case for whether Article 50 needs to be triggered by an Act of Parliament, which judgment in January will no doubt inform the way we enter into negotiations with our European partners), whatever our views on President Trump (is it wrong I still find it difficult to say that with a straight face?), we can all, I hope, agree that we are facing a period of relative uncertainty and the challenges faced by British people and businesses will not be small. Inevitably there will be casualties along the way who need help. We will be looking for our Unsung Heroes then.

R3 and others are doing their very best to help the insolvency profession to navigate these great challenges, starting next year by helping us get comfortable with a whole new set of Insolvency Rules (the biggest redraft on insolvency legislation since 1986), a massively changing funding environment, more government consultations than you can shake a stick at, revised professional guidance and a million other things. I have every confidence that the profession will come through these challenges in good time to help the country with its own.

And this is where we square the circle, with Brian Blessed OBE. I recently had the good fortune to meet Brian, at a champagne reception prior to the Hampshire Sporting Dinner earlier this month, and he was kind enough to autograph my copy of his autobiography, Absolute Pandemonium, with the inscription, “Go for it!”.  This is a man of extraordinary talent and determination, who – at the age of 80 – has possibly squeezed more experience out of life than any other person yet living, but who lives as heartily now as he did aged 20. And yet the world at large knows him best for one catchphrase and for being loud and eccentric.  He came from humble beginnings and has endured numerous hardships but his drive to succeed, to push himself to the absolute limits and to help worthy causes has always seen him through. He is a living metaphor for the insolvency profession.

So, as we look forward to a 2017 which will be anything but dull, let us all be a bit more like Brian, pictured here in a scene from Henry V in the magnificent character of Exeter, the man who is sent into the French camp to extend Henry’s terms for peace and – to the insidious Dauphin – a dire warning of the consequences should negotiations fail.

“Once more unto the breach, dear friends, once more!”

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Mike Pavitt

Posted: 6th December 2016

T: 023 8048 2275

E: Email Me