European-wide insolvency laws could be introduced

The European Commission is drawing up a number of “radical” legislative changes, with a shake-up of insolvency at the heart of their new strategy.

The priorities were outlined in an EU document released yesterday and it is expected that further details about how the regime would work in practice will be made available at the end of the month.

The report said: “The Commission has begun preparatory work with the intention to put in place a minimum harmonisation directive focusing on specific aspects of insolvency.

“Subject to further analysis and consultation, a legislative proposal focusing on specific aspects of insolvency could be envisaged for next year, based on commonly agreed principles and minimum rules which would reduce the differences between the national insolvency regimes while strengthening weaker regimes.”

Supporters of the proposals argue that different rules across the 28 nation bloc created difficulties for some businesses and, in certain circumstances, made it harder for creditors to claw back money.

But plans for a new framework have been delayed for several years, due in part to the political sensitivities involved.

The UK Government is among those who have made their case that existing laws are already up to the standards expected by EU law-makers.

At Royds we have a wealth of experience representing clients in cases involving complicated insolvency laws. For more information please visit or contact Stewart Wilkinson or Ashok Patel.