Vol 21 (2024) - Issue 2

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A Broad Review of Insolvency Law in Australia?

Synopsis
Australian insolvency law was last subject to a comprehensive law reform project in the mid-1980s, with the Australian Law Reform Commission's General Insolvency Inquiry, led by the late Ron Harmer. The Harmer Report produced significant structural change for personal and corporate insolvency law in Australia, including the introduction of a new restructuring procedure inserted into Part 5.3A of the Corporations Act 2001 (Cth) (Voluntary Administration), based in part on the (then) newly introduced Administration process in the Insolvency Act 1986 (UK). Since that time, there have been several piecemeal reforms and legislative adjustments to timelines and procedures, but no general review of the entire insolvency law system. Australia retains a divided insolvency law framework, with separate laws for corporate insolvency (Corporations Act 2001 (Cth)) and personal insolvency (Bankruptcy Act 1966 (Cth)).
In September 2022, the Federal Parliament's Joint Committee on Corporations and Financial Services ('PJC'), which has general oversight of corporate law reform in Australia including corporate insolvency law reform, began an inquiry into corporate insolvency in Australia. The PJC delivered its report in July 2023 and recommended a broader and more general review of the entire insolvency system (both corporate and personal).
This article considers the PJC's report and comments on the potential for meaningful law reform based on its recommendations.