Does the Office of Fair Trading have no pity? One of the few things that is keeping the accountants and lawyers out of the poor house these days is helping out companies that go bust. Now here comes the OFT suggesting that they might be overcharging for their services.
It is certainly a tempting target. Charging anything to the creditors of a company that has run out of money is going to look pretty bad. And some of the bills are huge. PwC has already received more than £150 million for its role as administrator of Lehman Brothers’ European arm. Unsurprisingly, this issue gets MPs very exercised.
Yet the evidence that there is something seriously wrong is fairly thin. According to research carried out for the industry trade body, there are only seven countries with similar recovery levels where the costs of closing a business are lower.
Some smaller accountancy firms complain that the big, juicy insolvencies are monopolised by the big four. But you need serious resources to handle something like Lehman Brothers.
It may be that the OFT does find competition problems. But the industry seems pretty relaxed. In any case, the OFT is not aiming to complete its inquiry until the end of next year, by which time the work may be tailing off again.