Q&As

How does Brexit effect forum shopping for corporates and bankruptcy tourism for individuals?

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Published on LexisPSL on 11/01/2021

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • How does Brexit effect forum shopping for corporates and bankruptcy tourism for individuals?
  • Principal points

How does Brexit effect forum shopping for corporates and bankruptcy tourism for individuals?

Brexit will have a major effect on both forum shopping for corporates and on bankruptcy tourism for individuals.

Given the ‘skinny’ free trade agreement proposed (which does not replicate the effects of Regulation (EU) 2015/848 (Recast Regulation on Insolvency), some of the adverse consequences of the loss of forum shopping for corporates could be mitigated, if the EU allows the UK to join the Lugano Convention as an independent contracting State. The Lugano Convention applies to the recognition and enforcement of civil and commercial judgments between contracting States. The EU, along with the European Free Trade Agreement States, are currently members of the Lugano Convention and have an effective veto on other States being allowed to join. One might assume that given the ‘skinny’ free trade agreement, the veto will be lifted in the future and the UK will be allowed to join Lugano as an independent contracting State, (see Practice Note: Tracker—Lugano Convention

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