How is the Trustee’s Remuneration Fixed?

 

The provisions of the Insolvency Act 1986 and the Insolvency Rules 1986 give some guidance as to how a Trustee’s remuneration is to be fixed.

 

A Trustee’s remuneration should be fixed by reference to the following:

 

(i)                 value of the assets realised; or

 

(ii)               value of the assets distributed; or

 

(iii)             on a time basis. 

 

In addition, the Practice Statement on Fixing and Approval of the Remuneration of Trustees (2004) provides guidelines as to the approach the Courts should take in fixing remuneration so as to ensure that applications relating to remuneration are dealt with fairly as well as flexibly.  The statement also seeks to ensure that any remuneration, which the Courts are called on to assess, is fixed on a fair and reasonable basis and by reference to value.

 

Who can Challenge Fees?

 

A “person dissatisfied” with the conduct of the Trustee such as a bankrupt, a creditor or any other dissatisfied person.

 

Recent Case Law

 

In recent years, the Courts have shown an increasing and marked inclination to reduce fees, largely with the benefit of hindsight.

 

In 2007 a creditor successfully mounted a challenge in the High Court to the Trustee’s remuneration, which was calculated on a time basis at £21,265.50 exclusive of VAT. 

 

The Judge made a number of findings, such as unreasonable and excessive claims for certain items of work carried out.  For example, the time spent on dealing with the calculation of the Trustee’s remuneration claim by calculating time sheets was grossly disproportionate and reduced from £5,257 to £1,650.

 

The Trustee’s remuneration was finally fixed at £13,613.50.

 

This line of authority has since been followed.

 

Our Services

 

If your Trustee in Bankruptcy has failed to provide a detailed account of the fees charged, you may wish to consider making an application to the Court fixing the Trustee’s remuneration.

 

West London Law Solicitors Limited have retained Counsel who represented the successful litigant in the above case and we are able to accept instructions relating to challenging, negotiating and fixing Trustee’s remuneration and assist with all other aspects of bankruptcy matters.