I rise to support my noble friend Lord Flight—I do not want to get into the habit but in this instance I do. I, too, pay tribute to R3—I hope my noble friend the Minister is not feeling left out here. I have also had a chance to speak to the people from R3 and meet them. I have known them for many years because when I was chairman of the corporate finance faculty of the Institute of Chartered Accountants in England and Wales, R3 was set up and I have remained in touch with it. R3 does a good job, as had been said around the Room. The insolvency profession in the UK is the envy of the world and R3 has helpfully given us some information to prove it.
All that having been said, there are instances of insolvency practitioners charging frankly eye-watering fees, in some famous instances greater than the sums
they have returned to creditors, and in some instances there have been suggestions that they have stopped at the point where no more fees could be taken out of the company concerned. For this reason, more perhaps than many other reasons, I feel it is helpful to encourage creditors to meet. Creditors in these circumstances will include people who are in fact investors in a company, through mezzanine debt or something like that, and have a vested interest. As I confessed earlier on, I have been in such rooms. It is useful to see and meet fellow creditors because a dialogue will then exist between creditors outside the liquidator’s fees, and plans and actions take place. Often in such circumstances, there is, for example, potential litigation—which was discussed in earlier clauses—that might take place against a bank, perhaps, or even against a director, so meeting other creditors in the same environment is very helpful.
The suggestion that 10% of creditors should be required to call a physical meeting does not sound onerous but it could build delays into the insolvency process and increase costs. Attention has been drawn to a recent insolvency, that of a wedding gift website. In that instance, 10% of the value of the creditors was equivalent to hundreds of individuals. In the case of small businesses where debts are typically low, in value terms, it would take a large number of creditors to get to the 10% threshold. For these reasons, I support the amendment.