- The Act dates back to the 1880s and has been the subject of ad hoc amendments over the years. The procedural rules of the Act are not only outdated, but they also conflict with the rules that govern other court proceedings
- The new Bill, seeks to consolidate the law relating to bankruptcy, insolvency, receiverships, provisional supervision and winding up.
- It also aims to accommodate corporate and individual insolvency; and facilitate the rehabilitation of an insolvent debtor. Additionally, it proposes to repeal the Bankruptcy Act, and matters connected with, or incidental to that Act, including the amendment of the Companies Act.
The Joint Select Committee of Parliament, currently reviewing Jamaica’s bankruptcy and insolvency legislation, is expected to conclude deliberations on the proposed new bill when they meet over the weekend.
The Committee, which comprises members of the Senate and the Lower House, was established in January to deliberate and report on the Bankruptcy and Insolvency Act, 2014.
The Act dates back to the 1880s and has been the subject of ad hoc amendments over the years. The procedural rules of the Act are not only outdated, but they also conflict with the rules that govern other court proceedings.
The new Bill, seeks to consolidate the law relating to bankruptcy, insolvency, receiverships, provisional supervision and winding up.
It also aims to accommodate corporate and individual insolvency; and facilitate the rehabilitation of an insolvent debtor. Additionally, it proposes to repeal the Bankruptcy Act, and matters connected with, or incidental to that Act, including the amendment of the Companies Act.
The committee is expected to sign off on final recommendations, after which the new Bill will go to Parliament for debate and eventually promulgated into law.
To assist with informing the discussions, a public forum on the Bankruptcy and Insolvency Act, was held at the University of the West Indies (UWI) Mona campus in St. Andrew last evening (April 24).
In attendance, was Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, who chairs the committee and has responsibility for the Bill.
He noted that the Government is aware of the need to encourage entrepreneurship and facilitate rehabilitation of entities facing bankruptcy, hence its work to modernise Jamaica’s bankruptcy and insolvency laws.
“The need for reform of the law on bankruptcy and insolvency is based on several factors, including the fact that the existing law does not attempt to address the stigma of individual bankruptcy or corporate insolvency, and the interest of creditors are given priority consideration over all other stakeholders,” he said.
Minister Hylton noted that the Jamaican law on bankruptcy and insolvency is presently contained in the Bankruptcy Act, and the Companies Act. The Bankruptcy Act covers individual bankruptcy, whereas the Companies Act deals with the winding up of insolvent companies.
He pointed out that the new comprehensive Bankruptcy and Insolvency Act will incorporate both corporate and individual insolvency.
Pointing to the major benefits of the new legislation, the Minister noted that it will render the insolvency process less time-consuming and costly, and will seek to address the stigma of personal bankruptcy or corporate insolvency.
Also, under the new law, the interests of all stakeholders will be given due consideration. It also makes provisions for rehabilitation or re-organisation of the business affairs of the debtor.
In addition, a licensing regime for insolvency practitioners is also to be introduced under the new legislation.
In the meantime, Chief Executive Officer of the Private Sector Organisation of Jamaica (PSOJ), Dennis Chung, said his organisation is in support of the new legislation. The PSOJ’s Insolvency Reform Committee, has been working on the Bankruptcy and Insolvency Act for the past two years.
Mr. Chung noted that when passed, the new legislation will provide “tremendous benefits for our economy and the business community”.
He stressed that the insolvency process is important in helping to develop and grow the economy, create jobs, and encourage entrepreneurship. He noted that this process is a primary feature in many advanced economies.
“It helps to encourage risk taking and goes a far way in removing the stigma associated with failed businesses which many times happen because of no fault of the persons running the business,” he said.
The forum was put on by UWI’s Faculty of Law, in partnership with the Caribbean Policy Research Institute (CaPRI) and the PSOJ.
Among the panelists were: Attorney at Law and Chair of the PSOJ’s Insolvency Reform Committee, Hilary Reid; Co-Executive Director, CaPRI and Head, Department of Economics, UWI, Mona, Dr. Damien King; Deputy Dean, Graduate Matters and External Affairs, Faculty of Law, Suzanne Ffolkes-Goldson; and Chartered Accountant, Insolvency Practitioner, and Director of the Advisory Services Department, PricewaterhouseCoopers, Wilfred Baghaloo.
Three of the panelists also slated to this weekend make presentations to the committee, which will also meet next week.