After the Corporate Insolvency and Governance Bill was published on 20 May 2020, it raced through the House of Commons and the House of Lords, coming into force in under six weeks as the Corporate Insolvency and Governance Act 2020, with some of the temporary measures taking effect from 1 March 2020. Although the new tools are entirely untested, the sooner they become an integrated part of the UK restructuring landscape, the better.
The much-anticipated Corporate Insolvency and Governance Bill was published on 20 May 2020. The proposed legislation is split into two broad categories: temporary provisions brought about as a result of COVID-19 and permanent provisions which will result in fundamental changes to UK insolvency law. The proposals, both temporary and permanent, reflect a shift towards a more debtor-friendly regime.
The government recently announced that it will legislate to update the restructuring and insolvency systems, with the aim of the United Kingdom retaining the gold-standard regime. The reforms are a response to international developments (with countries such as Spain and the Netherlands recently introducing updated insolvency systems) and some domestic corporate collapses which have put the UK system under stress.
The United Kingdom's corporate governance regime has been stress tested in the past decade and in many respects it has done well. However, in response to certain high-profile corporate collapses which have caused heavy losses for creditors – in particular, individuals and suppliers with little opportunity to protect themselves against losses – and in the spirit of continual improvement, the government recently launched its Insolvency and Corporate Governance consultation.