Lloyd's Maritime and Commercial Law Quarterly
THE LEHMAN INSOLVENCY AND BEYOND
Lord Briggs *
This lecture explores how well the English legal system, through its substantive and procedural law, has responded to seismic insolvency events. It focuses on the multi-jurisdictional insolvency processes following the Lehman crash and the Icelandic banking crisis. It evaluates: (1) the adequacy, comprehensibility and predictability of the legal and regulatory framework, especially in dealing with the rights and liabilities of stakeholders and the beneficial ownership of assets; (2) whether the law produced a just result; (3) the sufficiency of the judicial resources and court procedures; and (4) to what extent shortcomings have been remedied. Overall, a broadly positive picture emerges.
The recent tenth anniversary of the Lehman insolvency makes this a useful moment at which to look back and ask the question: just how well is the English legal system (law, procedure and judiciary) able to respond to, and play its part in addressing, seismic events affecting, or threatening to affect, the world of finance and investment? It is a good time for such a review for a number of reasons. First, the 2008 banking crisis, at the heart of which lay the Lehman crash was, by far, the largest such event, certainly in my lifetime, and has yet to be outscored since then by anything similar. Second, the intensive litigation in the English courts to which the crash gave rise has now, almost, run its course, although there has remained still one Lehman case in the pipeline.1 Third, quite a bit has happened since then to improve the offering which the English courts and judiciary can contribute, and much more is now at an advanced stage of planning, consultation, design and testing. Finally, because of Brexit, there is, or may be, about to occur a fundamental unravelling of the structure which regulates and enhances the exercise of jurisdiction by the English courts in cross-border commercial and insolvency matters, and which provides for the ready enforcement within the EU, and the EEA, of their judgments and orders.
Now you may be thinking, and I would respectfully agree, that there could be few candidates worse placed than me for the conduct of such a review. Not only am I a judge (and therefore squarely in the firing line), but I case-managed and determined, both at first instance and in the Court of Appeal, a large number of the relevant Lehman cases. Worse still, I was spectacularly overruled in some of them. Nor do I bring to the table any
* Justice of the Supreme Court of the United Kingdom. This lecture was delivered in the series “The common law and finance: perspectives from the bench”, at the University of Oxford, on 7 February 2019.
1. In re Lehman Bros (in administration) (No 8) [2017] EWCA Civ 2124; [2018] Bus LR 730. The Supreme Court heard an appeal one week after this lecture was given and a month later affirmed the decision of the Court of Appeal: HMRC v Joint Administrators of Lehman Brothers International (Europe) (In Administration) [2019] UKSC 12; [2019] Bus LR 927; [2019] 1 WLR 2173.
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