Insolvency professionals are anticipating an increase in cross-border insolvencies and want to see more collaboration among jurisdictions to speed up the process, according to research commissioned by Grant Thornton (GT) and barristers chambers South Square
Consultancy Meridian West gathered the views insolvency professionals from 50 of the leading firms involved in cross-border insolvency from around the world. Almost two thirds( 63%) forecast the number of insolvencies involving offshore jurisdictions will increase over the next three years, with one in five (19%) maintaining activity will 'increase considerably' over this period, predominantly driven by an uplift in activity in the financial services sector.
According to the report, From discord to harmony, 85% of respondents want the courts in different jurisdictions to collaborate more to make multi-jurisdictional insolvencies fairer and more efficient.
The top three factors when evaluating the attractiveness of a jurisdiction are: its legal process and infrastructure (84%), cross-border assistance provisions (63%) and enforceability of foreign court orders and judgements (40%).
The Cayman Islands topped the list of most effective offshore jurisdictions, cited by 63% of those polled, followed by the British Virgin Islands (48%) and Hong Kong (37%).
Singapore emerged as a very effective location for cross-border insolvency for those with direct experience of multi-jurisdictional insolvency in the territory (75%). However, Singapore was not ranked very highly by respondents who provided feedback on the jurisdiction without direct experience there, indicating a potential gap in perception.
Steve Akers, recovery and reorganisation partner at GT, said: ‘With an anticipated uptick in cross-border insolvencies on the horizon, jurisdictions need to ensure their basic legal process and infrastructure is fit for purpose. Clearly, no single jurisdiction has got everything absolutely right, so we should be encouraging a wider debate about how all those involved in the legislative and judicial process might learn from each other and work more closely together to help ensure consistent and reliable standards are in place around the world.’
The report, From discord to harmony: the future of cross-border insolvency, is available via this link
