40 Years in Insolvency – Now Let’s Talk Honestly: Drowning in Complexity: Why the Insolvency Profession Risks Losing Its Purpose
This year marks 40 years since I joined the insolvency profession. I’ve had the privilege of helping thousands of directors, creditors, and stakeholders navigate some of the most difficult moments in business life. But as I look back, I find myself asking a difficult question: why has it become so hard to do what should be the simplest thing of all – to help?
Then vs Now: From Purpose to Process
When I started, we were working under the guidance of real visionaries. Roy Adkins, who I had the honour of working for, was one of them. As Chair of the IPA, Roy worked closely with government departments in shaping the Insolvency Act 1986 and the original Insolvency Rules. He knew the profession needed proper regulation. We were emerging from a Wild West era where standards varied wildly, and reform was long overdue. The Act was necessary. The rules were welcome. But that was 40 years ago.
Roy used to tell us some of the difficulties he faced with the law writers at the time. Even then, they seemed to be operating on another planet, detached from the realities of the profession, and with little understanding of what the sector actually needed or why. That was four decades ago. Today, the law writers seem even more remote, creating frameworks that feel disconnected from real-world insolvency practice.
Since then? Complexity has been heaped upon complexity. Layer after layer of rules, procedures, obligations, guidance, and red tape. What started as a framework to support good practice has changed into a compliance machine. And somewhere along the way, the purpose got lost.
Getting to the Starting Line: The Cost of Being Ready
Today, just getting to the point where an insolvency practitioner (IP) is allowed to act requires enormous time, money and energy:
- Ongoing CPD obligations.
- Annual internal control reviews.
- Regulator visits and follow-up action plans.
- Estate and client account audits.
- GDPR policies, AML procedures, conflict checks.
- Personal indemnity insurance renewals, often with tighter exclusions.
- Data protection compliance (GDPR).
- Anti-money laundering audits and suspicious activity reporting. Sanctions list checking for every case.
- Pension Protection Fund dealings.
- Director disqualification reporting obligations.
- Cybersecurity and secure client communications.
- Bonding.The list goes on.
And for a sole trader or small firm of IPs, it’s getting harder and harder every year, it won’t be long before there are only big firms left because they can afford a full time compliance manager / department. Is that the sort of profession we want?
Let’s talk about bonding as an example. It made sense in the 1980s, when the profession needed to demonstrate accountability and control over client funds. But in 2025? Payouts are incredibly rare. Clients do not understand why it should be needed. And it overlaps with PI cover. Why do we still cling to it? Why haven’t we rethought this and others’ entire systems?
Law Without Limits: The Paralysis of Over-Regulation
UK insolvency law is no longer a guiding light. It’s a labyrinth.
Dozens of statutory obligations, hundreds of Rules, thousands of procedural hurdles. Everything must be done in precisely this way, at this time, to these people. There is no room for discretion. No space for pragmatism. We have entire software systems just to keep track of it all.
If we asked AI to compress and simplify the Insolvency Act and Rules without losing their impact, I genuinely believe it could do it. The logic is there. The clarity is missing. And let’s not forget what history teaches us: complexity is how civilisations fall.
Reporting That Nobody Reads
And then there are the reports. What creditor, director or stakeholder actually reads them despite all the cost and effort that goes into their preparation?
Most are 20 or 40 pages long. People don’t read anything nowadays, let alone a 40 page report drenched in legal language… with page after page spent justifying remuneration… with little on what matters: What happened? Was this the right solution? Could anything more have been done? Could the business have been saved?
We’ve created a system where the appearance of transparency has replaced genuine engagement. It’s no wonder creditors disengage. Directors feel overwhelmed. And IPs themselves feel isolated and unsupported. My fridge, when there’s a problem with it, talks to me more effectively via its app than IPs do in their reports.
Risk Without Empowerment
We bear an enormous weight:
- Personal liability for decisons made or not made.
- Professional indemnity excesses.
- Public criticism.
But where is the matching trust in our judgement? Where is the support to try innovative solutions? Regulators inspect whether we filed the right documents, not whether we delivered the best outcomes early enough when it really matters. They assess the neatness of file notes, not whether we had all the tools we needed to do what was really needed and employed them at the right time.
What Makes a Good IP? It Depends Who You Ask
To regulators: a good IP is tidy, procedural, meticulous.
To the public: a good IP is empathetic, honest, solution-focused, able to see the bigger picture.
Those two visions are drifting further apart. We’re attracting the wrong kind of people. The profession now appeals to box-tickers and paper-pushers. But the best IPs need commercial acumen, emotional intelligence, communication skills, and courage. How many of those people are we losing because they see a profession drowning in bureaucracy?
Insolvency Isn’t Alone: Stagnation Across UK Law
It’s not just insolvency law that’s been left behind. Across the UK legal system, we see critical frameworks that are decades out of date:
- Companies Act 2006 – now nearly 20 years old – still anchored in ideas from the 1980s, despite the rise of digital and global businesses.
- Landlord and Tenant Act 1954 – regulating commercial leases in a world where flexible working and online retail have transformed property markets.
- Employment Rights Act 1996 – built for a pre-gig economy, pre-remote working world.
- Trustee Act 1925 – still influencing how we manage modern trusts and investments.
- Building Act 1984 – only partially updated after serious tragedies like Grenfell exposed how dangerously out of step it was.
In each case, the result is the same: complexity builds up, patch after patch (patching our roads doesn’t work, why should it work here?), and reality drifts away. Professionals, businesses, and the public are forced to navigate outdated frameworks that were designed for a different era.
The consequences are not just frustration and inefficiency. They are mistrust, inertia, and wasted opportunities.
Insolvency is no different. We are trying to solve 21st-century problems with late-20th-century laws. It’s no wonder the system feels broken.
There Must Be a Better Way
We need another Roy. Someone with vision, courage and the trust of both government and the profession to rewrite our laws and simplify the rules.
40 years is far too long to keep any one set of legislation, even if it’s patched in the meantime. The world has changed. Business has changed. Directors have changed. Insolvency has changed. Only the law hasn’t.
A Final Word: Why I’m Still Here
Despite everything, I still love this profession. Because at its best, it matters. It saves livelihoods, people’s hard work. It brings dignity to failure. It gives people a way forward when they feel lost. It enables people to rebuild their lives financially and healthwise.
But it’s time to be honest. We need reform, not more rules. We need to trust our professionals, not tie them in knots. And above all, we need to remember that insolvency should be about people and solutions and not just paperwork.
That’s what I believed in 1985. And I still believe it now.