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Welcome /  Blog /  2014-12-doc8 On the future of European Insolvency Law

2014-12-doc8 On the future of European Insolvency Law

Over a year after delivering the INSOL Europe Academic Forum’s 5th Edwin Coe lecture in Brussels (October 2012) it has been published, see Bob Wessels, 'On the future of European Insolvency Law', in: Rebecca Parry (ed.), European Insolvency Law: Prospects for Reform, INSOL Europe, Nottingham Paris, 2014, pp. 131-158 (also published in: 5 International Insolvency Law Review 2014/3, pp. 310-332). In this lecture I have argued that 'insolvency' is a true part of the legal skeleton for an internal market in the meaning of Article 114 TFEU. The Commission has put the revision of the Insolvency Regulation in its Work Programme for 2012. The revision is one of the measures in the field of 'Justice for Growth' set out in the Commission’s Action Plan implementing the Stockholm Programme. The revision links in with the EU’s current political priorities to promote economic recovery and sustainable growth, as set out in the Europe 2020 strategy, and its very recent initiative to modernise insolvency proceedings and to contribute to an environment that offers second chances to failing entrepreneurs, leading to the recommendation of March 2014. I have given also some examples of interaction between EU law and national law, the lack of cooperation between Member State to align their implementation efforts and the necessity for a unified and coherent EU law. With insolvency being one of the essential pillars upon which the internal market rests, we presently lack clear concepts, terms and norms as well as guiding principles. This results in the present rather fragmented and inconsistent nature of European insolvency law. The challenge is to understand and articulate the paradigm shift in insolvency, from the sacrosanct 'pay what you owe' to the balanced promotion of the continuity of companies in distress and reintegration of over-indebted consumers into society. Further research and debate should lead to the creation of a design for an insolvency law that continuously will meet the key objectives within the focus of EU policies on the longer term. Overarching and guiding principles then must fit in the overall legal structure for an internal market. More specific, European insolvency law’s substantial and procedural forms should be brought into alignment with norms and principles which are predominant in non-insolvency law area. European insolvency law, in future, will further challenge the tension which exists between underdeveloped legal policies concerning insolvency in the EU and the traditional sometimes out-moded national concepts of insolvency law. There is much to be done, interaction, synchronisation, adjustment, unity, coherence. In my opinion this calls for a coordinating unit, which will operate at EU institutional level. Such an organisation (I suggest to call it: European Insolvency Service) would have as an overall aim to develop and maintain a world-class European insolvency law and regulatory framework, to deliver services to insolvency practice (creating forms and maintaining relevant insolvency databases), to assist in the development of a regulation of the insolvency profession, to coordinate basic information to be of assistance to courts, to ensure and facilitate coordination in cross-border cases, to advise government departments and agencies on insolvency and related issues, to provide information to the public via its website, and to continuously monitor the efficiency and effectiveness of all matters of European insolvency law. 2014-12 - ON THE FUTURE OF EUROPEAN INSOLVENCY 2012-10-11