Something Old, Something New: Recasting the European Insolvency Regulation

AuthorGerard McCormack
DOIhttp://doi.org/10.1111/1468-2230.12169
Publication Date01 Jan 2016
Gerard McCormack
justice law and policy in a way which is antithetical to a discourse of rights,
egalitarianism, inclusion and justice. The Criminal Justice and Courts Act 2015
diminishes the human rights of young people in custody by endangering their
physical and emotional security and it ultimately prevents secure colleges from
developing in a way which is dedicated to inclusion, human rights, equality and
young people’s healthy development. The law needs to be more responsive to
the range of complex realities facing those children sentenced to custody, and
develop a framework for acknowledging their vulnerabilities and sensitivity and
ensuring the protection of their rights and welfare while incarcerated. Where
the state has deprived a child of liberty, the state has a special responsibility
for that child’s welfare. Accordingly it is incumbent upon the state to provide
that child with practical and effective protection from inhuman and degrading
treatment by the state’s own agents.
Something Old, Something New: Recasting the
European Insolvency Regulation
Gerard McCormack
This paper critically evaluates the recasting of the European InsolvencyRegulation - Regulation
(EU) 2015/848 - in the context of the EU Europe 2020 growth strategy. According to the
Council of Ministers, through the protection of creditors and the survival of business, the new
legislation should contribute to the preservation of employment in these challenging times. The
paper argues that worthwhile improvements have been made by extending the scope of the
regulation; clarifying and confirming contentious areas of interpretation; smoothing the inter-
relationship between main and secondary insolvency proceedings and improving information
flows. But the overall effect is to enhance complexity. The recast Regulation carries the whiff
of political compromise and, at times, seems to point in different directions at the same time.
The Europe 2020 strategy promulgated by the European Union1talks about
fostering economic recovery and sustainable growth. The objective is to fa-
cilitate a situation where economic and social systems are adaptable, resilient
and fair; where economic activity is sustainable and where human values are
respected. Part of the 2020 strategy involves a European Commission recom-
mendation on a new approach to business failure and insolvency2and also
possible new harmonisation measures on the qualifications and conduct of in-
solvency practitioners and the avoidance of transactions that are antecedent to
Centre for Business Law and Practice, University of Leeds.
1SeeEurope 2020 – A European Strategy for Smart, Sustainable and Inclusive Growth (2010).
2 See Commission Recommendation of 12 March 2014 C(2014) 1500 final and see also the
Commission Communication, A New European Approach to Business Failure and Insolvency COM
(2012) 742.
C2016 The Author. The Modern Law Review C2016 The Modern Law Review Limited.
(2016) 79(1) MLR 102–146 121
Recasting the European Insolvency Regulation
insolvency proceedings.3But an important part of the strategy also involves
recasting the Insolvency Regulation.4
Political agreement on the text of the Regulation was reached in December
2014; it was formally adopted by the European Parliament on 20 May 2015 and
was published in the Official Journal on 5 June 2015.5Most of the provisions
will come into force on 26 June 2017.6According to the President of the
European Council: ‘The new legislation, through the protection of creditors
and the survival of business, will contribute to the preservation of employment
in these challenging times’.7
This is a bold claim but also one that is sufficiently vague that it is difficult
to disprove. What one can safely say however is that the changes to the original
Insolvency Regulation – Regulation 1346/2000 – are not as far reaching
and fundamental as the language might imply.8The recast does not alter the
structure of the original though it does engraft a potential new set of group co-
ordination proceedings. But the main thrust of the changes involves incremental
measures designed to extend the scope of the regulation; to clarify and confirm
contentious areas of interpretation; to smooth the inter-relationship between
main and secondary insolvency proceedings, and to improve infor mation flows
including through the inter-connection of national insolvency registers. On
the whole, there are worthwhile improvements but the overall effect is to
double the length of the Regulation and to increase complexity. In par t, the
new Regulation carries the whiff of political compromise seeming to point
in two different directions at the same time.9But the process of creating an
ever-closer Union, to which the UK remains signed up, remains an uneven
one.10
3 See generally the European Parliament report Harmonisation of Insolvency Law at EU Level at
http://www.europarl.europa.eu/meetdocs/2009_2014/documents/empl/dv/empl_study_insol
vencyproceedings_/empl_study_insolvencyproceedings_en.pdf/ (all URLs were last accessed
14 October 2015).
4 See Press Release, New Rules to Promote Economic Recovery 4 December 2014 at
www.consilium.europa.eu/uedocs/NewsWord/en/jha/146041.doc/. For the original Euro-
pean Commission recommendations for reform of the Regulation, see Proposal for a new Regula-
tion COM (2012) 744 and see also Report from the Commission on the application of Council Regulation
(EC) No 1346/2000 COM (2012) 743 (Commission Report) and the Hess–Oberhammer–
Pfeiffer external evaluation of the Regulation commissioned by the European Commission –
see JUST/2011/JCIV/PR/0049/A4.
5 Regulation (EU) 2015/848 - OJ L 141, 5.6.2015.
6ibid, Arts 84 and 92.
7 Press Release n 4 above.
8 The original Commission proposals for revision of the Insolvency Regulation have been de-
scribed by leading commentators as ‘very decent’ - G. Moss QC, [2013] Insolvency Intelligence 55
- and as a ‘modest attempt .. . to improvethe status quo’ – H. Eidenmuller, ‘A New Framework
for Business Restructuring in Europe: The EU Commission’s Proposals for a Reform of the
European Insolvency Regulation and Beyond’ (2013) 20 Maastricht Journal 133, 150.
9 See, generally, F. Mucciarelli, ‘Not Just Efficiency: Insolvency Law in the EU and its Political
Dimension’ (2013) 14 European Business Organization Law Review 175.
10 See written ministerial statement of 15 April 2013 ‘Government consider that it is in the UK’s
interest to opt in to the proposal because it will be of general benefit to creditors and businesses
in the UK and EU’ at http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm13
0415/wmstext/130415m0001.htm.
122 C2016 The Author. The Modern Law Review C2016 The Modern Law Review Limited.
(2016) 79(1) MLR 102–146

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