Principle-oriented harmonisation of transactions avoidance law

• Applicant: Professor Dr. Reinhard Bork
• Subject Area: Private Law
• Term: from 2019 to 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 426705872

The aim of the present project is the development of a harmonised transactions avoidance law in the EU. If, and under which conditions, transactions which took place before the opening of insolvency proceedings ought to be challengeable on the grounds of disadvantage to the creditors is a question which is answered on different grounds in different Member State jurisdictions. Therefore, there is wide agreement that the harmonisation of transactions avoidance laws would resolve a major obstacle in the functioning of the single market and is, accordingly, desirable. This task will be approached through the present project. However, this shall not occur in the typical manner, whereby national legislatures are considered and the respective best solutions to detailed problems are brought together to form a statutory proposal. Rather, proposals shall be made on a principle-oriented basis whereby “principles” are to be understood as basic values. There are grounds to believe that such principles can be determined in the case of transactions avoidance law and that they can be used to assess existing regulations as well as to develop optimal regulations de lege ferenda, thereby applying a principle-oriented approach to harmonisation. With respect to national insolvency laws in general, and specifically transactions avoidance laws, such principles, however, have yet to be determined. Addressing this task is the main objective of this project. This project shall, in practice, be completed in three steps. In the first step, the basic principles shall be determined, not only for the German legal system, but rather by way of cross-border ground-breaking research aiming to encompass, if possible, all national insolvency regulations within the EU. This shall be achieved by a working-group, made up of recognised experts on transactions avoidance law from all EU Member States, who will evaluate the national insolvency laws, and materials including case law and literature. The presumption stands, but is to be examined, that such principles can be determined (for example, the principle of equal treatment of creditors and that of the optimal realisation of the debtor’s assets on the one hand, and the protection of trust on the other) and that the national transactions avoidance laws, despite all deviation in the details, are founded in the same principles. In the second step, it shall be attempted to determine the points which, on a principle-oriented analysis, are to be regulated in a harmonised transactions avoidance law to best satisfy and balance the involved interests (namely, entirely irrespective of whether these are prescribed in a national jurisdiction or not). In a third step, this shall form the basis for the development of a proposal for an EU-wide regulatory framework which is capable of generating overall agreement.

• DFG Programme: Research Grants