“Come and talk”: The insolvency judge as de‐escalator

Published date01 December 2020
Date01 December 2020
AuthorRuben Hollemans,Gijs Dijck
DOIhttp://doi.org/10.1002/iir.1388
RESEARCH ARTICLE
Come and talk: The insolvency judge
as de-escalator
Ruben Hollemans
1
| Gijs van Dijck
2
1
Doctoral Researcher in Insolvency Law,
Maastricht University, Maastricht, The
Netherlands
2
Professor of Private Law, Maastricht
University, Maastricht, The Netherlands
Correspondence
Ruben Hollemans, Doctoral Researcher
in Insolvency Law, Maastricht University,
Maastricht, The Netherlands.
Email: ruben.hollemans@
maastrichtuniversity.nl
Abstract
How insolvency courts handle conflicts is an impor-
tant aspect of the Directive on preventive res-
tructuring frameworks and it has become more
important in the current COVID-19 crisis, as a result
of which insolvencies are or will be on the rise. Insol-
vency courts are one of the key actors that can impact
the length and costs of conflicts, and, consequently,
the effectiveness and efficiency of insolvency proceed-
ings. However, there is a lack of empirical research
that examines when, why and how insolvency courts
prevent actual or potential conflicts. This article
reportstheresultsofanempiricalstudythatexplored
the strategies used by insolvency judges in the Nether-
lands to resolve conflicts and to prevent a dispute
from becoming one. The results show that insolvency
courts deploy under the radarmediation-like strate-
gies to prevent actual and potential conflicts involving
insolvency practitioners, enhancing the speed and
cost-effectiveness of the winding-up of cases in the
perceptions of stakeholders. Consequently, insolvency
judges do not only act as adjudicators in court pro-
Ruben Hollemans, was responsible for the data collection, data processing, and drafting the article and this article is
part of the doctoral research. Gijs van Dijck, the author assisted in part of the data collection and commented on draft
versions of the article.
DOI: 10.1002/iir.1388
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and
reproduction in any medium, provided the original work is properly cited.
© 2020 The Authors. International Insolvency Review published by INSOL International and John Wiley & Sons Ltd.
360 Int Insolv Rev. 2020;29:360378.wileyonlinelibrary.com/journal/iir
ceedings, but also take on mediation-like roles, at least
in some jurisdictions. Limitations and challenges of
these roles are discussed. The findings of this study
are relevant for determining and regulating the roles
and tasks of insolvency judges.
1|INTRODUCTION
Conflicts in insolvency cases, like in other areas of the law, are likely to lead to lengthy legal
proceedings. This hampers an efficient and timely winding-up or restructuring of the estate.
One of the actors who can have an impact on the length and costs of conflicts is the court. The
issue of how insolvency courts handle conflicts hasbeen recognized in the Directive on preventive
restructuring frameworks, second chance and measures to increase the efficiency of restructuring,
insolvency and discharge procedures (Restructuring and Insolvency Directive).
1
Title IV of the
Restructuring and Insolvency Directive contains a number of rules referring to the role of insol-
vency courts, which aim to improve the general effectiveness and efficiency of insolvency proce-
dures in terms of duration and costs.
2
From this, we derive that the EU legislator assumes courts
play an important role in providinga quick, flexible and low-cost insolvency procedure.
The importance of the role that courts play can be further illustrated by the attention, the
concept of mediation has received, in general but also in the context of insolvencies. Mediation,
which is a distinctive type of alternative dispute resolution (ADR), can be defined as a:
facilitative process in which disputing parties engage the assistance of an impartial
third party, the mediator, who helps them to try to arrive at an agreed resolution of
their dispute.
3
The European Union encouraged mediation in civil and commercial matters by introducing
the Mediation Directive in 2008,
4
because of the:
cost-effective and quick resolution of disputes in civil and commercial matters
through processes tailored to the needs of the parties.
and because of the assumption that:
agreements resulting from mediation are more likely to be complied with volun-
tarily and are more likely to preserve an amicable and sustainable relationship
between the parties.
5
Pursuant to the Mediation Directive, which scope is limited to cross-border disputes,
6
medi-
ation can be ordered by the court and the role of mediator can be assumed by a judge who is
not responsible for any judicial proceedings concerning the dispute in question.
7
Interestingly, in
various jurisdictions, both inside and outside the European Union, the role of judges has evolved
from merely being an adjudicator, to becoming more actively involved in a mediation-like role to
prevent or resolve conflicts in these cases also in cases assigned to them for adjudica tion.
8
HOLLEMANS AND van DIJCK 361

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