Time for Reform? a comparison of Canadian and English Preference Laws

Abstract

Sia Vatanchi compares and contrasts the national English and Canadian preference provisions in relation to bankruptcy and insolvency process – suggesting that although both nations are common law countries and share a similar history, the currently state of preference law in London is less effective and sensible than Ottawa’s. The author explains that an emphasis on the subjective motivation of the debtor has proven to be a challenging task for the office-holder to demonstrate, particularly when combined with the defence of commercial pressure. These features have helped to manufacture a regime whereby the pari passu principle underlying preference law is not realised as best possible. Until Parliament institutes reforms aimed at developing a more objective and effects focused system, which requires a greater embracement of the equal-sharing model, English preference law will remain outdated and ineffective.