Does the regulation of compensation for a bankruptcy administrator ensure the right of fair compensation for work as is established in article 48 of the constitution of the Republic of Lithuania?

Pastaruosius kelerius metus Lietuvoje vykdomi su įmonių bankroto valdymu susiję pakeitimai dėl savo reikšmingumo laikytini šalies bankroto sistemos pertvarka. Atviras ir diskusinis išlieka bankroto administratoriaus atlyginimo klausimas. Šiame darbe įvairiais pjūviais analizuojamas atlyginimo bankroto administratoriui skyrimo reglamentavimas, siekiant sistemiškai įvertinti, ar galiojančiu teisiniu reguliavimu nėra paneigiama Lietuvos Respublikos Konstitucijos (48 straipsnis) laiduojama asmens teisė į teisingą apmokėjimą už darbą. Apibrėžta, jog tam, kad apmokėjimą už darbą bankroto administratoriaus profesijos kontekste būtų validžių prielaidų laikyti teisingu, reikšminga, kad gaunamas atlygis pateisintų teisėtus administratoriaus lūkesčius: gauti atlygį už atliktą darbą; kad gaunamas atlyginimas atitiktų atliekamo darbo sudėtingumą ir jam atlikti būtiną asmens kvalifikaciją; kad atlyginimas už atliktą darbą būtų sumokamas laiku. Vykdyta analizė, nagrinėjanti, kokį poveikį visuomenėje teisiniu – socialiniu aspektu turi tai, kad bankroto administratoriui yra atlyginama teisingai ar neteisingai atskleidė, kad egzistuoja sąsajos tarp teisingo atlyginimo administratoriui ir efektyvaus bankroto proceso. Lyginamosios analizės metodu identifikuotos atlyginimo skyrimo bankroto administratoriui reglamentavimo Lietuvoje gairės ir konstatuota, jog bankroto administratoriaus atlyginimo skyrimo teisinio reguliavimo sritis Lietuvoje negali būti vertinama kaip teisiškai nuosekli. Aktualios įstatymo nuostatos Lietuvoje jas palyginus su tapačiu reguliavimu Latvijoje, Jungtinėje Karalystėje ir Švedijoje, laikytinos labiausiai nepalankiomis patiems administratoriams. Remiantis empirinio tyrimo metodais - kiekybiniu tyrimu (uždarų klausimų anketinė apklausa) ir kokybiniu tyrimu (nestruktūruoti giluminiai ekspertiniai interviu) surinktais duomenimis, įvardintos esminės atlyginimo skyrimo bankroto administratoriui teisinio reglamentavimo lemiamos praktinės problemos: nėra išgrynintas bankroto administratoriaus statusas; sukuriama neproporcingai didelė rizika bankroto administratoriams; nėra funkcionuojančio bankroto administratoriaus atlyginimo dengimo mechanizmo beturčių įmonių atveju; administratorių skyrimo sistemoje palikta teisinių spragų, galimybių piktnaudžiauti; Vyriausybės patvirtinti administratoriaus atlyginimo dydžiai – rekomendacinis įrankis, nesukuriantis imperatyvo jais vadovautis. Prieita išvados, jog galiojantis reglamentavimas neužtikrina teisėtų bankroto administratoriaus lūkesčių dėl atlyginimo patenkinimo. Pasitvirtino iškelta hipotezė, kad atlyginimo skyrimo bankroto administratoriui reglamentavimas Lietuvoje neužtikrina asmens teisės į teisingą apmokėjimą už darbą.During the last few years, major changes have been made to bankruptcy administration regulations in Lithuania. Due to their scope and major implications, these changes can be construed as a systematic reform of bankruptcy regulations in general. Given these circumstances, the question of what is considered appropriate compensation for a bankruptcy administrator remains problematic and continues to be widely debated. An automatic computerized bankruptcy administrator assignment system was launched on January 1st, 2015 that has completely changed the workload and compensation of bankruptcy administrators. For example, a professional bankruptcy administrator is often automatically assigned to administer an insolvent company that has very few or no assets. In cases such as this, the bankruptcy administrator is not only deprived of due compensation, but is also obliged to use his or her own personal funds to cover the bankruptcy’s procedural expenses. The constitution of the Republic of Lithuania (Article 48) ensures all of its citizens the right to fair compensation for work. Compensation for the services of a professional bankruptcy administrator should not be an exception. This thesis analyses the legal regulations concerning a bankruptcy administrator’s compensation in order to assess whether they do not breach the constitutional right of fair compensation for work. The first part of the paper presents the concept of fair compensation for work in the context of bankruptcy administrators. The theoretical analysis establishes that compensation for bankruptcy administrators should be deemed as fair when legitimate professional expectations have been met. Three main legitimate expectations was identified: first - to be compensated for the work done; second - to receive compensation that correlates with the scope, complexity of duties and qualifications needed to accomplish them; third – to be compensated for the work done in a timely manner and without undue delay. Research carried out during the writing of this thesis concerning the legal and social aspects of whether the compensation for a bankruptcy administrator was fair or unjust indicated that there is a correlation between fair compensation for a bankruptcy administrator and the overall effectiveness of the bankruptcy process. Lack of adequate compensation for a bankruptcy administrator impacts on his or her motivation to put forth the best professional efforts possible. The second part of this thesis employs a comparative analysis to present and examine the main principles of a bankruptcy administrator’s compensation regulation in Lithuania: (1) A bankruptcy administrator is assigned randomly by an automated system and is subsequently appointed by an unappealable ruling by the court (2) An insolvent company’s creditors decide the amount of compensation for the bankruptcy administrator. This decision can be challenged in the courts, and a court may issue an unappealable ruling on the bankruptcy administrator’s compensation based on government recommendations for appropriate compensation amounts (3) In the case of insolvent companies with limited or no assets at all, there is no mechanism in place for compensation for a bankruptcy administrator and even the burden of procedural expenses lies with the administrator. The regulation compensation for bankruptcy administrators in Lithuania is not legally consistent. A comparison of Lithuanian regulations to relevant legal provisions in Latvia, the United Kingdom, and Sweden reveals that Lithuania’s regulations are relatively the least favorable ones for bankruptcy administrators. The quantitative analysis of this thesis is based on a survey of practicing bankruptcy administrators that was carried out with the cooperation all of the associations of insolvency professionals. The survey was conducted between January-April, 2017 and 84 bankruptcy administrators (24,8 percent of all practicing professionals) took part in answering a questionnaire composed of six closed-ended questions related to the compensation of a bankruptcy administrator. To complement the quantitative research and in order to attain a more thorough interpretation of it, qualitative research was also carried out. Two in-depth interviews on bankruptcy administrator compensation regulations were conducted with experienced professional insolvency administrators. The third part of this thesis uses the aggregate results from empirical research (the quantitative survey) and the qualitative research (unstructured interviews with experienced professionals) to identify key practical problems posed by the current legal regulations concerning a bankruptcy administrator’s compensation: (1) Lack of clarity in defining a bankruptcy administrator’s status. The current regulation compromises a bankruptcy administrator’s status as an entrepreneur as was established in case law precendents (2) Existing regulations pose great financial risks to bankruptcy administrators with virtually no means available to mitigate those risks (3) There is no mechanism for providing for compensation of a bankruptcy administrator when he or she is assigned to administer insolvent companies with limited or no assets (4) The current bankruptcy administrator appointment system lacks clarity and consistency and allows for legal loopholes that leaves it open for abuse (5) The government approved recommendations for a bankruptcy administrator’s compensation remain only as guidelines and in practice there is no imperative to follow them. This thesis concludes that current regulations do not meet legitimate expectations for compensation of a bankruptcy administrator’s work. The hypothesis raised by this thesis that Lithuanian legal regulations on compensation for a bankruptcy administrator do not ensure an individual’s right to fair compensation for work performed has been confirmed. A few key recommendations were made based on the results of the quantitative and qualitative research. First, it is essential to establish the exact status of a bankruptcy administrator – it could be modeled as that of an entrepreneur, a public servant, or an independent insolvency consultant hired by the government. This should be decided upon after an evaluation of financial costs and, no less importantly, after a thorough examination of the implications on the integrity of bankruptcy as a legal process. Once a decision on a bankruptcy administrator’s status has been made, current regulations could be reviewed and much needed legal consistency could be developed. Second, questions relating to a bankruptcy administrator’s compensation and remuneration of procedural expenses when administering insolvency of companies that have very limited or no assets need to be resolved. A government-run fund with contributions from all operating companies could be set up. It would cover the bankruptcy administrator’s expenses and compensation in case there are insufficient assets in the insolvent company, and could be modeled after the existing Guarantee Fund. Alternatively, a financial fund could be set-up by collecting a small fee from all practicing bankruptcy administrators. In the latter event, the amount could be based on a percentage of actual received income for administering insolvent companies with sufficient assets. The final recommendations of this thesis stress the urgency of cooperation between the Authority of Audit, Accounting, Property Valuation and Insolvency Management with practicing bankruptcy administrators. Cooperation would allow for the elimination of legal loopholes and opportunities for abuse of the present automatic bankruptcy administrator appointment system. This is crucially important, as these factors have a serious negative impact on the integrity of bankruptcy processes in general and also highly impact the fairness of a professional bankruptcy administrator’s compensation in particular. Furthermore, seeking fairness in the bankruptcy administrators’ compensation system, a recommendation is made to initiate legal changes that would make regulations to be followed by creditors and courts on a bankruptcy administrator’s compensation imperative, rather than advisory. This thesis relies on a number of Lithuanian and foreign academic publications. Both theoretical and empirical research methods are used throughout the paper