Recognition of UK insolvency proceedings post-Brexit: The impact of a ‘No Deal’ scenario

Abstract

Abstract This paper examines the impact of a ‘no deal’ or ‘hard’ Brexit on the recognition of insolvency proceedings commenced in the UK by the remaining Member States of the European Union (EU) post-Brexit. The paper considers the framework currently implemented by the Recast European Insolvency Regulation and the possible approaches when it will cease to apply to proceedings commenced post-Brexit. The paper identifies that there will be no overarching framework in the event that ‘no deal’ is reached between the UK and the EU for post-Brexit arrangements, resulting in reliance on individual Member States' domestic laws to determine recognition of insolvency proceedings commenced in the UK. The paper sets out the contrasting approaches of five of the UK's key trading partners in the EU: France, Germany, Ireland, the Netherlands and Spain. The paper concludes that UK insolvency proceedings will not be recognised in a consistent manner in these Member States, which will be detrimental to stakeholders in, and ultimately the economies of, the UK and these Member States. In doing so, the paper underlines the importance of an agreement being reached between the UK and the EU on the recognition of cross-border insolvency proceedings for the benefit of all parties.