An Empirical Study of Australian Judicial Decisions Relating to Insolvency Practitioner Remuneration

Abstract

Insolvency practitioner remuneration is controversial as recent debates and reforms in Australia evidence. The role of courts in reviewing and setting remuneration has also been called into question. These debates have lacked, however, empirical evidence about remuneration and the role of courts. This article analyses 162 decisions from Australian courts to find out what roles courts are playing in reviewing and setting corporate insolvency practitioner remuneration. The findings suggest that there are still important roles for courts, particularly in the context of allegations of misconduct. The study also suggests, however, that there is merit in continuing to explore low cost, out-of-court mechanisms for reviewing and setting remuneration. The study found that many claims for approval of remuneration are coupled with requests from practitioners seeking other orders, are unopposed and typically approved as claimed. Over one third of the cases involved claims for amounts of less than $50,000. Out-of-court mechanisms focused solely on remuneration may also provide more certainty and consistency across remuneration decisions which will benefit all stakeholders.

Keywords: insolvency, liquidators, insolvency practitioner remuneration