Commenting on the Government’s Brexit White Paper, published earlier today, Duncan Swift, vice-president of insolvency and restructuring trade body R3, says:
“It’s encouraging to see the Government take post-Brexit cross-border insolvency issues seriously, and we welcome both the commitment to seek a new agreement with the EU on civil judicial cooperation, and the specific inclusion of insolvency in any such deal.
“Under the current framework, UK insolvency judgments and procedures are automatically recognised across the EU, and vice versa. This makes it relatively quick and cost effective to resolve insolvencies when assets and insolvent companies are spread across Europe. It helps in all sorts of cases, from dealing with the insolvency of a major multinational corporation to hunting down assets squirreled away overseas by a fraudster. Failure to replicate the current set-up post-Brexit would make it much harder to resolve cross-border insolvencies from the UK.
“Without a deal, post-insolvency returns to creditors would be hurt, it would be harder to rescue businesses and jobs, it would be harder to tackle cross-border fraud, and the costs of cross-border insolvency procedures would go up. All this would have a very negative impact on the UK’s reputation as a place to invest, lend, and trade.
“We look forward to working with the Government to ensure any deal meets the needs of the insolvency and restructuring profession and, crucially, UK creditors and other stakeholders affected by insolvency.”