Set out below are seventeen principles of professional conduct devised by the trade body for Australian insolvency practitioners to govern and inform their conduct as liquidators, administrators, receivers and bankruptcy trustees.
The Insolvency Practitioners Association of Australia (IPA) says that the primary purposes of its Code of Professional Practice (Code) are “to:
- set standards of conduct for insolvency professionals;
- inform and educate IPA members as to the standards of conduct required of them
- in the discharge of their professional responsibilities; and
- provide a reference for stakeholders against which they can gauge the conduct of IPA members. “
The summary of principles presented below is taken from the Code. Each principle is described in great detail in the Code. A PDF copy of the 124 page Code is available at the IPAA website, or may be found HERE. Earlier versions of the Code may be found HERE. This current edition of the Code has been effective since 1 January 2011.
Principle 1 Members must exhibit the highest levels of integrity, objectivity and impartiality in all aspects of Administrations and practice management.
Principle 2 When accepting or retaining an Appointment the Practitioner must at all times during the Administration be, and be seen to be, independent.
Principle 3 Disclosure and acceptance of a lack of independence is not a cure.
Principle 4 Members must communicate with affected parties in a manner that is accurate, honest, open, clear, succinct and timely to ensure effective understanding of the processes, and their rights and obligations.
Principle 5 Members must attend to their duties in a timely way.
Principle 6 A Practitioner must not acquire directly or indirectly any assets under the administration of the Practitioner.
Principle 7 When promoting themselves, or their firm, or when competing for work, Members must act with integrity and must not bring the profession into disrepute.
Principle 8 When dealing with other Members in transitioning or parallel appointments, Members must be professional and co-operative, without compromising the obligations of the Member in their own particular appointment.
Principle 9 Practitioners must maintain professional competency in the practice of insolvency.
Principle 10 A Practitioner is entitled to claim remuneration, and disbursements, in respect of necessary work, properly performed in an Administration.
Principle 11 A claim by a Practitioner for remuneration must provide sufficient, meaningful, open and clear disclosure to the Approving Body so as to allow that body to make an informed decision as to whether the proposed remuneration is reasonable.
Principle 12 A Practitioner is entitled to draw remuneration once it is approved and according to the terms of the approval.
Principle 13 When accepting an Appointment the Practitioner must ensure that their Firm has adequate expertise and resources for the type and size of the Administration, or the capacity to call in that expertise and those resources as needed.
Principle 14 Members must implement policies, procedures and systems to ensure effective Quality Assurance.
Principle 15 Members must implement policies, procedures and systems to ensure effective Compliance Management.
Principle 16 Members must implement policies, procedures and systems to ensure effective Risk Management.
Principle 17 Members must implement policies, procedures and systems to ensure effective Complaints Management.
The IPAA says:
“The Code is a living document. It will continue to be amended from time to time to reflect changes and developments in insolvency law and practice. …. (and) it is the fundamental building block upon which the insolvency profession sets and manages standards of professional conduct. We were gratified to see the ready acceptance of the Code by the profession, regulatory bodies and the Courts following its initial release.”
Author: P Keenan 28/4/2011