EU pensions in insolvency proceedings—equal treatment under EU law (Re Michael Bernard McNamara)

EU pensions in insolvency proceedings—equal treatment under EU law (Re Michael Bernard McNamara)  

The High Court has considered whether EU law requires pensions registered in another EU Member State to be exempted from a bankrupt’s estate in the same manner as a UK pension registered with HMRC. Mr Justice Nugee decided to make a reference to the Court of Justice to determine a preliminary issue in the bankruptcy of Michael McNamara, an Irish property developer who had been made bankrupt in the UK. It was argued on behalf of Mr McNamara—as part of an application to claim for the benefit of his estate in bankruptcy an Irish pension scheme—that to read UK law literally would mean that UK workers would receive a greater degree of protection than EU workers moving to the UK in respect of protection of their pension rights should they become bankrupt. Written by Harry Gillow, barrister, at Monckton Chambers.

Re Michael Bernard McNamara [2020] EWHC 98 (Ch)

What are the practical implications of this case?

This case has obvious implications for creditors where an EU national becomes bankrupt in the UK.

If the Court of Justice agrees with the submissions advanced on behalf of Mr McNamara, then EU nationals will automatically benefit from the protection accorded (in the vast majority of cases) to the pension rights of UK national bankrupts. This will reduce the assets available to creditors in such bankruptcies.

Furthermore, it is notable that Nugee J in effect decided to ignore the submissions on behalf of Mr McNamara’s trustees in bankruptcy that Mr McNamara was attempting to pick and choose the parts of the UK insolvency regime that suited him. If the Court of Justice agrees with Nugee J, it may serve to make the UK insolvency regime more attractive to EU citizens hoping to take advantage of the new protection offered to pension schemes alongside other elements of the regime.

Finally, the Court of Justice’s judgment will be highly relevant to the question of the scope of Article 49 of the Treaty on the Functioning of the European Union (TFEU), and particularly to the extent to which factors not at first glance connected to self-employment

Subscription Form

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Related Articles:
Latest Articles:

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author:

Zahra started working as a paralegal at Lexis Nexis in Banking and Insolvency teams in April 2019. Zahra graduated with a 2.1 honours in a BA French and Spanish, completed the GDL at BPP University and is seeking some experience before commencing the LPC. She has undertaken voluntary work for law firms in London, Argentina and Colombia.