Aipedia: Insolvency practitioners

AI-drafted progress reports to creditors

Aipedia, by the Apex broking team · Last reviewed 2026-10-27

Generative AI can draft statutory progress reports, but the IP remains responsible for every figure and statement sent to creditors. Wrong fee, asset or dividend information can lead to complaints, RPB scrutiny and negligence claims.

Part of: AI in Insolvency practitioners

In short

R3 sees progress reports as a major near-term opportunity for AI. Rolling forward last period's narrative with an AI tool saves time but can carry stale statements about assets, fees or dividend prospects into a report creditors rely on. The Insolvency Code of Ethics requires the IP to decide whether output is appropriate (R321.1) and to supervise the team (R103.2). Errors usually surface as complaints; a creditor who relied on a wrong statement may also claim, which PI usually responds to, subject to the wording.

How AI is used to draft progress reports

Office holders send periodic statutory progress reports to creditors covering receipts and payments, assets realised, investigations, fees and expenses, and the likely dividend. Much of each report repeats or updates the last one, which makes it a prime candidate for generative AI. R3's 2026 report names progress reports, alongside proofs of debt, as a major near-term opportunity, and lists reporting and compliance automation among current uses.

A typical workflow pulls figures from the case management system, rolls forward the previous narrative and asks an AI tool to update it.

The duties that apply

A progress report is the IP's account to creditors, and creditors use it to decide whether to challenge fees or conduct. The Insolvency Code of Ethics applies:

R321.1: decide whether the AI draft is appropriate for the purpose before it goes out.
117.3 A2: automation bias. A rolled-forward narrative reads well even when it is stale.
R1.10 and R103.2: the IP signs for the team's drafting and must supervise it.
130.1 A1: actions should be justified by written contemporaneous records, which the report should match.
R104.3 and R104.4: confidentiality, including care about what case data goes into which tool.

Getting the statutory content right is the IP's job whether a person or a tool produced the draft.

What can go wrong

Illustrative scenario: a firm uses a generative AI tool to update a liquidation progress report. The figures table is pulled correctly from the case system, but the narrative is rolled forward from the previous period and still says a property sale is "expected to complete shortly" when it fell through months ago. It also restates the earlier dividend estimate. A creditor relies on the report, does not pursue its own recovery action, and later complains that it was misled. The RPB asks the IP to explain the discrepancy.

Other common errors:

fees or expenses described inconsistently with the figures or with the approved basis;
asset values or realisations carried forward from a superseded estimate;
dividend prospects that do not reflect the current claims register;
confidential or irrelevant information from other cases appearing in the text.

Complaints, RPB scrutiny and PI

Progress report errors often first appear as a creditor query or a complaint to the RPB. Disciplinary outcomes are published by the RPBs, and current sanctions are collected by the Insolvency Service. No AI-related sanction had been identified as at October 2026, but a misleading report would be judged on its content, not on how it was drafted.

If a creditor suffers loss by relying on a wrong statement, a negligence claim may follow. PI usually responds to such claims, subject to the policy terms, and the IPA's PII guidance makes PII compulsory for individual members. Cover for regulatory defence costs and complaint handling varies between wordings. A fee challenge on its own may not be a PI claim at all. See handling AI-generated complaints and circumstance notification.

Practical controls

Regenerate narrative from current case notes each period rather than rolling forward the last report.
Tie every figure in the text to the receipts and payments account and the time costs record.
Check fee and expense wording against the approved basis.
Have a reviewer read the report as a creditor would, looking for statements that are no longer true.
Keep the reviewed draft and sign-off on file.

How Apex helps

Apex arranges PI for insolvency practitioners, and a broker can check how your wording treats creditor claims and regulatory costs arising from reporting errors. See PI for IPs and the insolvency practitioners hub.

Sources

Frequently asked

Can I use generative AI to draft statutory progress reports?

Yes, as a drafting aid. The IP remains responsible for the report's content, and under R321.1 must decide whether the output is appropriate before it is sent. The main risk is stale narrative carried forward, so regenerate from current records and check every figure.

Is a wrong progress report a PI matter or a regulatory matter?

It can be either or both. A complaint to the RPB is regulatory, and some PI wordings cover the defence costs. If a creditor loses money by relying on the report, a negligence claim may follow, which PI usually responds to, subject to the terms.

Should I disclose AI use in progress reports?

There is no RPB rule requiring it as at October 2026. R3 found some clients require confirmation that AI is not used in certain processes, so check any instructions from appointors or creditors and record your approach.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.