The draft Insolvency (Amendment) (EU Exit) Regulations 2018 (the “draft Insolvency SI”), published under the European Union (Withdrawal) Act 2018, repeals parts of the retained Regulation (EU) 2015/848 on insolvency proceedings (the “EUIR”) and makes consequential amendments to insolvency and related legislation in the U.K. The Joint Committee on Statutory Instruments has reported regulations 4 and 5 of the draft Insolvency SI for “requiring elucidation, for defective drafting and for unexpected use of powers”.
Regulations 4 and 5 of the draft Insolvency SI are concerned with insolvency proceedings which are already in progress on exit day: regulation 4(2) provides that where proceedings under the EUIR were opened before exit day, the amendments made by the draft Insolvency SI will not apply; regulation 5 provides a “safeguard mechanism”, allowing courts in the U.K. to disapply the savings provisions under certain conditions
In a letter to the Insolvency Service, the FMLC highlights the importance of the safeguard mechanism and that it would welcome attempts to redraft regulation 5 to contain more precise and technical language.
Available as: PDF.