Britain’s status as a global centre for handling cases of corporate insolvency is being threatened by the European Commission. Officials in Brussels may soon propose curbing the right for financially troubled multinational businesses to choose the jurisdiction in which their case will be heard.
The City of London benefits hugely as a result of English insolvency law, perceived to be more flexible and sophisticated than many Continental legal regimes, but this financial advantage could soon vanish. The current review may also attempt to bring insolvency law into line throughout the European Union.
Gerald Irwin of Sutton Coldfield based licensed insolvency practitioners and business advisers said, “The synchronisation of European insolvency law could be quite alarming. The Commission is examining the European insolvency regulation, which was in 2000, aimed at allowing simpler decision-making over which country had jurisdiction in cross-border insolvency and which legal system governs proceedings. It is now thought that the Commission may be poised to propose a dramatic extension of the scope of the regulation.”
“Whereas there could be some aspects ripe for harmonisation, other matters remain at the heart of each individual country’s history and legal system,” added Mr. Irwin.