INSOLVENCY PRACTITIONERS will be provided new guidelines to assist them with cross-border insolvencies.
In a joint project with Nottingham Trent University and the University of Leiden in the Netherlands, guidelines are being drawn up for judges, solicitors and insolvency practitioners (IPs) across Europe.
The project, European Cross-Border Insolvency: Promoting Judicial Cooperation, is intended to build on earlier work by bodies such as Insol Europe, the American Law Institute and International Insolvency Institute’s joint project on global principles for cross-border insolvency.
Nottingham’s professor Paul Omar (pictured) will lead the way alongside fellow professors Bob Wessels and Jan Adriaanse whom are currently working on simplifying working structures to allow for better European cooperation and efficiency.
The working title, EU Cross-Border Court-to-Court Cooperation Guidelines, will be designed to encourage efficient handling of debtors’ estates on a cross-border basis.
Recently cross-border insolvencies have become more difficult to achieve, with court judgments and policies conflicting.
In the last five years there was a move to sign all countries to a universal set of insolvency guidelines known as UNCITRAL. However, a Supreme Court judgment in the UK negated that framework. Instead of an insolvency being recognised in all jurisdictions, the court found that an IP would have to begin legal proceedings in each jurisdiction in which they need to pursue funds.
The profession was up in arms at the increased complexity, time and cost that would be added to cross-border insolvencies as a result.
However, the EU has now stepped in and is shelling out €275,000 (£233,000) for the guidelines to improve communication and co-operation between courts handling cross-border insolvency cases in the EU.
It is being promoted by the European Commission directorate general on justice and further cash is being pumped into the project from the EU’s Civil Justice Programme.
Following the publication of the guidelines training will be provided to judges, court staff and legal practitioners (including IPs). This will take place in two stages: firstly conferences set up by various partners such as the International Insolvency Institute; secondly training will be provided at Nottingham, Leiden and Eastern Europe.
Professor Omar said: “Training will allow legal professionals to develop uniform interpretations of insolvency terms and concepts and make them familiar with the accepted guidelines.
“By doing so, they will enhance the efficiency and effectiveness of insolvency proceedings having cross-border effects, which will in turn provide greater certainty and predictability in the market.”
A review and advisory group of judges, academics and senior insolvency practitioners will review the draft guidelines which are expected to be presented in September.
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