Impact of Brexit on applicable law in cross-border insolvencies

From 31 December 2020, the European Regulation on Insolvency Proceedings (the “EIR”) ceased to apply in the UK. As a result:

• The EIR provides the rules for when the law of the place in which the insolvency proceedings have been opened can be supplanted by another law, but only that of a member state.
• The UK is no longer a member state and English law will no longer be applied under these rules.
• This will have a significant impact on English and EU businesses, particularly for creditors of debtors in EU states where the debts arise under English law agreements.

This briefing from our Restructuring, Turnaround and Insolvency team follows on from their previous note regarding the consequences for both insolvency proceedings in the EU requiring co-operation from the English courts and English insolvency and restructuring proceedings requiring co-operation in the EU jurisdictions.