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What Can We Expect to Gain from Reforming the Insolvent Trading Remedy?
Author(s) -
Williams Richard
Publication year - 2015
Publication title -
the modern law review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.37
H-Index - 22
eISSN - 1468-2230
pISSN - 0026-7961
DOI - 10.1111/1468-2230.12106
Subject(s) - insolvency , statutory law , creditor , scope (computer science) , misconduct , law and economics , yield (engineering) , empirical evidence , accounting , business , foundation (evidence) , bankruptcy , economics , law , political science , finance , debt , philosophy , materials science , epistemology , metallurgy , programming language , computer science
This paper argues that reform of the wrongful trading remedy in section 214 of the I nsolvency A ct 1986 is unlikely to yield significant increases in civil recovery for creditors of insolvent companies. The paper argues that the widely held view that procedural restrictions in the provision have unduly limited the application of the remedy are without foundation and, likewise, that there is little evidence that current modest levels of litigation under the provision demonstrate underperformance in the sanction relative to the scale of the misconduct against which it is directed. The paper draws on a wide range of analytical and empirical evidence to argue that the scope for application of the sanction is inherently limited by factors independent of the particular rules within the statutory remedy.