Vol 22 (2025) - Issue 4

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Towards Global Legal Literacy in Restructuring and Insolvency Law

Synopsis
The evolution of cross-border insolvency and restructuring law has been marked by efforts to harmonise terminology and practices to facilitate international cooperation. The mid-1990s saw challenges in understanding and aligning legal concepts across jurisdictions. Early efforts to address such challenges included the American Law Institute (ALI) Transnational Insolvency Project (1993) and the development of the ALI-III (International Insolvency Institute) Global Principles for Cooperation in International Insolvency Cases (2012). These initiatives aimed to improve court to-court communication and foster international collaboration. Key to these efforts was the creation of glossaries to define over hundred legal terms and expressions to promote consistent understanding across legal systems. Similar work in Europe led to the European Law Institute’s Instrument on Rescue of Business in Europe (2017), also addressing novel concepts in (preventing) restructuring. However, vague or undefined terms in legal frameworks, such as the EU’s Preventive Restructuring Directive (2019/1023), have created confusion, impeding harmonisation efforts. A global study is proposed to address terminological ambiguities in restructuring and insolvency law. Its goals include fostering a shared understanding of key terms, analysing past harmonisation efforts, and encouraging global legal literacy. Achieving clarity in legal language is essential to reducing (costly) misunderstandings, enhancing cooperation, and promoting efficiency in cross-border insolvency and restructuring practices.