The printing industry has strongly criticised a report commissioned by insolvency trade body R3, which praises the work of the insolvency industry.

The report, which was published by ComRes, includes figures which state that around two million jobs and 5,581 businesses were ‘saved’ by the insolvency industry in 2009. It also argues that UK insolvency practitioners were able to recover 84 cents in the dollar for creditors in 2009, according to World Bank figures.

But individuals from the print industry have responded by questioning the validity of the findings and expressing anger at insolvency laws, particularly the way pre-pack administrations allow companies who become insolvent to be sold on and continue trading, in many instances writing off debts to creditors and suppliers in the process.

Greg Nicholls, managing director of Response Envelopes, said: “The big concern for smaller companies is there doesn’t seem to be a law against those going into administration that would make them liable for reporting what goods owed to suppliers they still have on site.”

Nicholls argues that companies in insolvency should be tagged as such, so that their customers and suppliers are aware of the situation, and competitors who have avoided insolvency can benefit.

He added: “There must be a system where more onus is put on those at the top and I think the only way to do that is to have a system where there is some sort of tagging into the new company.

“Why should decent taxpaying businesses be forced to compete with these new entities? It is wrong. It provides very little incentive for people to run legitimate business when the company next to you is doing the same thing but has written off their debts and bought the company at half price.”

Steven Law, president of R3, said: “We believe the current system of fees set by creditors and regulation of insolvency practitioners is effective.

In many cases we believe there is a value, in many sectors, in rescuing businesses and preserving jobs. Insolvency practitioners are not usually associated with saving jobs and businesses, but when bought in early enough, evidence clearly supports this claim.”

R3 says it has written to print industry figures to explain its position on the report.