Supervision and Liability of Insolvency Practitioners

Abstract

This Master Thesis is dedicated to the research of problematic issues pertaining to supervision mechanisms and civil liability standards of IPs in following jurisdictions: Poland, the UK, Germany, the Netherlands, and Australia. Besides, the research is dedicated to the jurisdictional limits of supervisory and disciplining powers towards IPs acting in cross-border insolvency and potential harmonization challenges in this area. This research examines relevant legislation, as well as soft-law instruments, and best practices. Beginning with an examination of international and EU legislative frameworks, the research delves into the peculiarities of legislation of national jurisdictions, outlining divergences and practical challenges. The research revealed that there was made the first effort to harmonize liability of IPs in the Directive (EU) 2026/799, subsequently, providing recommendations for implementation. Also revealed that in terms of supervision and liability of IPs the most up-to-date and effective legislation framework, out of all examined jurisdictions, is in the UK. The central problematic identified, in regard to cross-border insolvency, is the lack of a coherent and effective mechanism for supervising and disciplining foreign IPs when they act outside their home jurisdiction. The solution proposed is to make a request by court to the court that appointed the IP to replace the practitioner within a reasonable period. This approach balances comity, cooperation, and accountability. It preserves the primary role of the court of home jurisdiction while ensuring that foreign representative remains subject to effective control when operating abroad.