Prophesying Britain's Future in the Balance of Social Policy and the Rescue Culture - Challenges to Post-Brexit Harmonisation
in Jennifer L. L. Gant (ed), The Rise of Preventive Restructuring Schemes (INSOL Europe 2018) 17-40
21 Pages Posted: 28 May 2021
Date Written: July 1, 2018
The pending spectre of Brexit and its impact on Europe and the United Kingdom (UK) along with the political uncertainty of a major world power in turmoil following the 2016 United States elections, calls into question the path that many social and economic policies may take in the future. The balance of social policy and economic efficiency is nowhere more evident than in the treatment of employees during bankruptcy/insolvency procedures, which may provide a barometer of changes yet to come.
As a member of the European Union (EU), the UK continues to be subject to Regulations and Directives that implement EU social policy objectives and influence the functioning of the rescue culture throughout the Member States. The EU has had a significant influence on the direction the UK has taken in matters of social policy since its accession in 1973. Arguably, this has forced the UK into a socially liberal and protective framework that it might not otherwise have adopted to such a degree had it not been within the EU’s sphere of influence. EU policy also had an influence on the UK’s adoption of the rescue culture, which is now the foundation for insolvency systems throughout the EU and in many modern world economies, though it is possible that the UK may have been a natural development on the legal path of the of the British insolvency system.
Now that Article 50 of the Treaty of Lisbon has been invoked, the UK is making its way toward a deal or no deal Brexit scenario. If and when Brexit becomes a reality, and Britain begins to untangle itself from the influence of the EU, how will the rescue culture and the social protections present within it under the current legal regime be changed? In what direction is the UK likely to go? While difficult to predict, the direction that the UK may take in the event that the European Communities Act of 1972 is eventually repealed and the UK is once again left to its own legislative devices, current conversations in Parliament give a certain flavour of potential futures. In addition, a consideration of different jurisdictions, such as America, Canada and Australia, each having a similar English common law origin and historical links to the UK, can be instructive in relation to which direction the UK may have taken had it never joined the EU. An analysis of this counterfactual position may then also provide a clue as to the direction that the UK may take
The UK has ever been the “odd man out” in the EU, springing as it does from a significantly different legal origin than the Franco/German model at the heart of the EU. By examining the developmental path of the United States, Australia and the UK in this area of law prior to EU accession, the behaviour and reactions of the UK during EU membership, and comparing this to similar developments in the comparator countries, it may be possible to forecast the eventual direction that the law of Post-Brexit Britain may take in relation to the social protections that may or may not be available during insolvency procedures in the future.
Keywords: insolvency law, corporate rescue, Brexit, employment protection, path dependency, European law, corporate insolvency,
JEL Classification: G3, J8
Suggested Citation: Suggested Citation