Finding a Forum for Insolvency: Using Digital Forums to Improve Due Process in Insolvency Proceedings While Preserving Speed, Certainty, Discretion, and Cost Considerations

Abstract

The recently enacted Small Business, Enterprise and Employment Act of 2015 makes sweeping changes to the insolvency framework of the United Kingdom, supplanting much of the 1986 Insolvency Act, which had already undergone substantial amendment since its original passage. These changes illustrate a broader trend in U.K. insolvency practice – a movement away from formal processes in favour of streamlined, more flexible solutions for insolvent companies.

We are faced with two, distinct and competing policy interests. On one hand, we want to increase certainty, minimize cost, and reach a resolution quickly and discreetly. However, on the other hand, we want a process that affords stakeholders the ability to reasonably voice their concerns and addresses those concerns in a manner that fairly and equitably resolves, or at least mitigates, disputes.

However, this paper argues that, by utilising readily available technologies, we can create a digital forum for insolvency practice where all stakeholders can readily voice their opinions and reasonably resolve their disputes, while not only preserving, but, in fact, improving the efficiency, cost-effectiveness and certainty of the process. We may no longer need to sacrifice due process for efficiency.

Keywords: insolvency, UK, United Kingdom, digital forums, e-government, bankruptcy, forum theory, forum philosophy, pre-pack, prep-packaged administration, schemes of arrangement, Small Business Enterprise and Employment Act of 2015, Insolvency Act

JEL Classification: G33, K, K20, K41, K33, K40, K4, K2, K10, K11, K12, K00