1 / 34

Convergence of European Law

Convergence of European Law. Dr Clive Vlieland-Boddy. World Legal Systems. Either Based on UK Common Law Or a codified system like Napoleon. Jurisprudence. Where legal decisions of judges use the assistance of previous decisions to assist with the outcome.

kizzy
Télécharger la présentation

Convergence of European Law

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Convergence of European Law Dr Clive Vlieland-Boddy

  2. World Legal Systems Either • Based on UK Common Law • Or a codified system like Napoleon.

  3. Jurisprudence • Where legal decisions of judges use the assistance of previous decisions to assist with the outcome. • Is the backbone of UK common law.

  4. Insolvency Law

  5. Encourage Global Enterprise Preserve Employment Manage Corporate Failure Promote Corporate Good Governance Encourage Sound Credit Practice and Financial Discipline Stability & certainty in market Maximizing value of assets Equal treatment of similar creditors Timely, efficient resolution of insolvency Establish Framework for cross-border insolvency Importance of Insolvency

  6. Overview • Debtor forum shopping within the EU • Why is the UK proving so popular as a ‘tourist’ destination? • Emerging principle and practice in the UK • Endgame? • EU legislative reform or convergence or both?

  7. Drivers to Go Bust in UK! • Totally accepts failure. • Leaders in EU for insolvency law • Seen as Financial Capital • Extensive legal and recovery expertise

  8. Why UK?

  9. Tourists and brothels… • ‘London risks becoming brothel for bankruptcy tourists’ The Observer 31st January 2010

  10. Presumably not the weather…

  11. Automatic discharge after a maximum of one year…

  12. All are welcome…

  13. Easy process…

  14. The problem is debtor forum shopping… Looking for the best place! – Cigarettes & Spirits! • Burden on the legal system • Frustrates creditors • More difficult and costly to investigate the debtor’s affairs and administer the estate • No ‘value added’ • Debtors falling between two or three countries (Vlieland-Boddy v Dexter)

  15. Endgame? • ‘Good’ Vs ‘bad’ forum shopping • Does free movement trump creditor protection?

  16. Convergence!

  17. Objectives • Possibilities for future convergence and consequent reduction in forum shopping • Make all Countries have very similar insolvency laws • Increase in scope and influence of comparative research: • Renewed academic interest, pan-European research projects, European Consumer Debt Network...

  18. Objectives • European Union and Council of Europe initiatives. • European Commission Communication: Overcoming the Stigma of Business Failure • Awareness of bankruptcy tourism as a driver of convergence:

  19. Trend Towards Convergence • France • Consumer insolvency system based on minor, consensual adjustments to contractual obligations. • 2004: “personal recovery” procedure: immediate and total debt discharge. • Sweden • Typical continental approach : restricted access, mandatory payment plan, debt counselling and voluntary negotiations. • 2007: removal of restrictions on access. • “zero proposal”: immediate debt discharge.

  20. Trend Towards Convergence • Netherlands • Mandatory payment plan (3 years). • 2008: discharge after one year for debtors unable to make part repayments sufficiently large to justify continuing plan. • England and Wales • IVA repayment plan as the “gateway criterion”. • Debt Relief Orders: mandatory debt counselling.

  21. Trend Towards Convergence • Ireland • Law Reform Commission recommendations 2009-2010. • Bankruptcy law: access, discharge, restrictions. • Introduction for first time of a non-judicial debt settlement system: inspired by UK and European regimes. • An outlier of European personal insolvency laws falls in line with laws of other Member States

  22. Summary of Basic Insolvency Law Requirements

  23. Key Principles • Debtors should have easy access to the insolvency system. • Creditor access should have legal rights of recovery where there is clear evidence that the debtor failed to pay a debt • The preferred test for insolvency should be the debtor’s inability to pay debts as they come due, known as the liquidity test. A balance sheet test may be used as an alternative secondary test. • The filing of an application to commence a proceeding should automatically prohibit the debtor’s transfer, sale or disposition of assets.

  24. Key Principles • In liquidation proceedings, management should be replaced by a qualified court-appointed official. • Director and officer liability for decisions detrimental to creditors made in pre – insolvency period

  25. Key Principles • Creditor interests should be safeguarded by establishing a creditors committee that enables creditors to actively participate in the insolvency process. • The committee should serve as a conduit for processing and distributing relevant information to other creditors and for organizing creditors to decide on critical issues

  26. Key Principles - Recovery • To establish rehabilitation procedures that permits quick and easy access to the process, • provide sufficient protection for all those involved in the process, • provide a structure that permits the negotiation of a commercial plan, • enable a majority of creditors in favor of a plan or other course of action to bind all other creditors. • provide for judicial or other supervision to ensure that the process is not subject to manipulation or abuse.

  27. Comparison with select formal rescue mechanisms - Europe

  28. Global Views

  29. INSOL’s Mission • “to take the leadership role in international turnaround, insolvency and related credit issues, facilitate the exchange of information and ideas and encourage greater international co-operation and communication amongst the insolvency profession, the credit community and related constituencies”

  30. GLOBAL FINANCIAL FRAMEWORK:CORE STANDARDS Transparency - Data Dissemination (IMF) - Fiscal Transparency (IMF) - Monetary and Financial Policy (IMF) - Public Debt Management (IMF/WB) - Banking Supervision (BCP) - Payment and Settlement (CPSS) - Insurance Supervision (IAIS) - Security Regulation (IOSCO) - Anti-Money Laundering (FATF/IMF/WB) Financial Sector - Corporate Governance (OECD) - Accounting & Auditing (IAS/ISA) -Insolvency & Creditor Rights (WB) Market Integrity (Infrastructure)

  31. End Game • Encourage restructuring plans • Single distribution mechanism for cross border insolvency • Bind all creditors across jurisdictions • Maximise value to all creditors where ever they are.

  32. Conclusions • It may be impossible to remove incentives for forum shopping without harmonisation: bankruptcy tourism remains very attractive. • Harmonisation may be practically impossible at present. • Personal insolvency laws may not be as closely linked to inherently national characteristics as often thought: common realities of credit society and political factors may be key. • Therefore, obstacles to convergence, if not harmonisation, can be overcome. • Convergence has begun, and looks likely to continue. • Natural convergence in national laws may remove incentives for forum shopping.

  33. Conclusions • With the EU all signed up to centralise on the EUJ and the EUCHR, convergence in all aspects of law will happen. • Insolvency is critical as EU extinguishes borders. • Common procedures and practices must be present. • Trading throughout the EU must be with the same creditor rights. • Macro Economics will converge and create one EU law on insolvency.

  34. The End 34

More Related