A Critical Comparison of the English and Australian Insolvency Regimes: where we are and where are we headed?
Speaker: Michael Murray
Michael Murray is the Legal Director of ARITA, the professional body in Australia of company liquidators and bankruptcy trustees, and insolvency lawyers and financiers. As such he is involved in the development of ARITA’s thought leadership, its submissions to government, and the well-established ARITA Code of Professional Practice. He is consulted on insolvency issues by regulators, courts and other professionals. His major projects at ARITA include the drafting of the ARITA Code, the development of its discipline regime, and his input into the high profile of ARITA in thought leadership and law reform. He edits and writes for ARITA’s Australian Insolvency Journal.
Michael is a visiting fellow at QUT Law School in Brisbane (working with Professor Rosalind Mason), was a government appointed member of CAMAC from 2011-2014, Australia’s corporate law reform body, and from 2001-2003, was a lawyer assisting on the HIH Royal Commission, examining Australia’s largest insolvency.
He is the author of insolvency text and practice books. His insolvency writing spans cross-border, bankruptcy, directors’ responsibilities, tax, professional regulation, banking regulation, and the use of technology. He has taught post-graduate insolvency law, is a member of INSOL Academics, and of the Insolvency Academics Network (IAN), and is an honorary member of ARITA. He has a law degree and a diploma in criminology from the University of Sydney.
Australia’s insolvency regime has been under close scrutiny in recent times, but with more focus on the profession and its regulation – remuneration, independence and oversight - than on the substance of insolvency. Assessing whether the regime properly deals with business distress through an efficient, cost effective and fair process is only belatedly receiving attention.
Even then populist level debate exists about the serious issues - costs and quality and creditor returns, the protection of directors, and at the higher end, about the approach of US Chapter 11. At a higher level, economists are looking at the need for promotion of entrepreneurial risk and a change of business culture. As to the latter, Australia’s thinking is said to be out of kilter internationally, including as against a more adventurous US, and England.
Australia has not looked at the bigger issues. The world has changed since the Harmer Report, and that of Cork, well though their reforms have served us. New questions first need to be answered before reforms are considered: what should we reasonably expect from an insolvency regime, and from its practitioners? and what should we expect of others - directors, businesses and their creditors in particular?
Where do each of Australia and England stand on these issues? Overall, in some aspects, Australia seems to be more advanced, but structurally and culturally, England may be ahead. What can one learn from the other in deciding on their future directions?
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