Dear Member

We are disappointed at the latest communication by TiX about the approach it intends to adopt on behalf of its various bank principals towards the level of IPs’ fees in respect of IVA proposals. Whilst recognizing any creditor’s right to agree individual fee levels (or not as the case may be), we are concerned that their newly advised approach runs the risk of making some IVAs insufficiently economic to make them attractive to any IP sponsor (especially as there is a chance that the supervisory work can be taken away from the nominee). As a result a proportion of debtors may be unable to employ their preferred option for dealing with their excessive indebtedness and be forced into bankruptcy; or longer-running debt management plans, with their generally accepted higher failure rates and lower returns to creditors.

We believe that insufficient credit has been given to the efforts of those across the IVA “industry” (IPs, major creditors, their agents, Insolvency regulators, the Insolvency Service, the BBA, the Debt Resolution Forum and R3) in working towards a consensual set of workable agreements across the wide area of issues and tensions relating to IVAs which began at the start of this year. TiX sat on two of the four working parties and were aware of the considerable progress that had been made, not just on fees but in other areas. This work continues.

R3 is a party to the multi-lateral discussions on the outstanding work strands, most recently on  23rd July at the first meeting of the  IVA standing committee (the smaller practitioner interest being represented by an R3 Council member, Chris Williams of McTear Williams & Wood (chriswilliams@mw-w.com ; telephone no. 01603 877541), and R3 by John Francis. We are urgently seeking clarification from TiX and their principals as to how they intend to operate their new arrangements such that the duties owed to their bank and credit card principals’ customers are fully respected, including the banks’ “treating customers fairly” (TCF) obligations; and asking for reassurance that lower volume operators will not be unfairly excluded from IVA work, either by design or accident.

Additionally we will be raising the issue of non-standard IVAs (consumer or trader IVAs) as here too we consider the fee structure outlined might not adequately reflect the costs associated with their initial proposals or subsequent supervision. We hope to meet TiX representatives shortly, but we are aware that some of their key staff as well as people at the Insolvency Service and BBA are currently on holiday.

As soon as we have more to report we will write again to our members.

Kind regards

 

Graham Rumney
Chief Operating Officer