The importance of a strong insolvency and restructuring regime for the UK economy

Since 31 May 2002, the European Insolvency Regulation (“EIR”) has had direct effect in England and Wales. This allows for the automatic recognition across Europe of insolvency proceedings in EU Member States. This means that Licensed Insolvency Practitioners (“IPs”) can take control and realise the assets of an insolvent company or of an individual who is bankrupt in another EU Member State quickly, cheaply and efficiently. This avoids the need for IPs to apply to the Court in the relevant jurisdiction to ask for recognition of their powers to act and then to apply for the repatriation of assets to the UK. In summary, it provides for rules on the choice of law, the recognition and enforcement of judgments and co-operation between IPs.