Tuesday 17 January 2017

Ruling flags lack of joined-up bankruptcy between US and here

Published 16/05/2015 | 02:30

The long-running, complex and multi-strand, Sean Dunne bankruptcy is only one example
The long-running, complex and multi-strand, Sean Dunne bankruptcy is only one example

It is an iron rule that gaps in the law will be sought out and exploited by smart lawyers, if only to buy time for their clients.

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It might not be popular, but doing their best by clients is what lawyers are paid for.

Oddly enough, at the Supreme Court yesterday it was the judges themselves, ruling in the Sean Dunne bankruptcy case, who seemed to go out of their way to flag a gap in the legal system here.

If you go bankrupt in Ireland then the European Communities (Personal Insolvency) Regulation means there is a streamlined system for managing the case - even if it involves more than one jurisdiction, as long as both are in the EU.

So, if you go bankrupt in Donegal, have business assets in Derry and a holiday home in France, there's a reasonably smooth process for coping with that, by no means rare, level of complexity.

Once you go outside the EU, however, there's no clear-cut regime for handling a cross-border personal insolvency involving an Irish debtor, debts or assets.

That's despite the fact that in reality our business world and legal culture overlap far more with the United States, for example, than with Italy or Hungary.

We all know that the inevitable result of a lack of legal clarity is expensive confusion.

The long-running, complex and multi-strand, Sean Dunne bankruptcy is only one example.

The problem, as the Supreme Court flagged, is that, unlike the United States and the United Kingdom, Ireland has not signed up to the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency.

That mouthful is actually a practical international protocol that means that if a court makes a judgment against me in New York, you can ask a court in Ireland to enforce the decision, for example by putting a receiver over property here, or vice-versa.

The Supreme Court didn't quite say this is something we desperately need.

But it probably is.

Irish Independent

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