Latest news is that the FCA review will not now be published until the end of 2015. This is the third delay and I wouldn’t be surprised if it drags on into 2016 or beyond.

No reasons have been given but I suspect this is the process referred to as “Maxwellisation”. This is the process whereby anyone subject to criticism in the report has the right to  see the criticism and comment in response. Those comments then have to be considered by the reports authors. It is the reason for the almost laughable delay in the Chilcot report and numerous others and has become the weapon of choice for lawyers wanting to delay and water down criticism of their client.

Two other interesting facts mentioned by Berg, a law firm acting on behalf of many small businesses claiming against RBS. Firstly, this delay may mean the report isn’t published until after the time limit for claims to be filed. Secondly, Berg note that, “RBS has appointed external advisors to launch an investigation into the treatment of small business customers. RBS have not confirmed who has been appointed. It is likely that if such a report is being carried out on behalf of RBS, the Bank will want to use the FCA’s further delay to its advantage by publishing its report first to demonstrate a proactive approach, despite its blanket denials to date and to minimise the impact of the FCA report”

I guess most of us will just have to sit and wait for the wheels of Maxwellisation to grind slowly forward before we get the chance to find out what the investigation has come up with.


David Bryan – Principal, BM&T

27th July 2015

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Today’s Accountancy Age highlights the gloom in the UK insolvency market as corporate and personnel insolvencies continue to decline. “Gormenghastian gloom pervades insolvency market”, its headline screams.  “There is a greater focus on value for money” comments one IP. Another quotes “it’s all down to pragmatism-in many cases creditors are choosing to get something back than nothing”.

Well blow me down! The market is finally waking up to the fact that a deal done consensually will pay back more than insolvency where the dreaded Insolvency word knocks goodwill and asset values for six, and IP’s fees take a further slice of what’s left. Add to that the headlines of over aggressive recovery by secured creditor banks, still in the government’s firing line, and it is not difficult to see the why attitudes are changing.

In fact the market is moving quicker than the law and the law is moving quicker on the continent than in UK. In France, Italy and Spain pre insolvency rescue processes have been introduced and the EU Regulation now encourages member states to introduce similar processes. The UK it appears is nowhere near following that advice. For a country that copper plates almost every directive that emanates from Brussels there is a strange reluctance to adopt one of its more sensible proposals.

Fortunately more savvy professionals have cottoned on to the benefits of Consensual Creditors Compositions, persuading often reluctant creditors with the merits of patience and forbearance whilst a practical turnaround plan is implemented. This requires a balance of skills from the financial skills to stabilise cash flows, refocus the business and business plan and manage stakeholder expectations through negotiation whilst implementing the plan improvements. IP’s who are underweight in management expertise and overweight in insolvency processes are not always best equipped for the task. It can be too easy when faced with a debtor deep in the zone of insolvency to take the high fee low risk option at the expense of jobs and unsecured creditors.

The fact is the market is changing and the professionals that operate in it are changing too.


Alan Tilley – Principal, BM&T

23rd July 2015

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