Prevention and elimination of modern slavery is a priority of this era, eliciting responses at an international level and in domestic laws. The duty of organisations to ensure transparency in their supply chains is the strongest representation of corporate responsibility in this field. Less attention has been given to the current/potential role of insolvency mechanisms, in relation to companies’ commission of modern slavery offences, and in relation to their failure to comply with their supply-chain obligations. This paper engages with this novel question by examining the proposition to incorporate a directors’ disqualification sanction into the United Kingdom framework governing companies’ modern slavery supply chain obligations. This represents an opportunity, insofar as the disqualification regime is ostensibly well-placed to address weaknesses in companies’ compliance with their responsibilities. However, it represents a challenge in that adoption and implementation would have to navigate drawbacks such as the limitations of existing grounds for disqualification and potential weaknesses in the design and enforcement of a bespoke sanction. Moreover, it should confront uncertainty as to whether disqualification is an effective tool for preventing misconduct by the professional/executive class of managers at the helm of large companies. Increased emphasis on regulating the human rights obligations of companies makes it imperative that this question is addressed.
Purpose The paper aims to examine the question whether legislative reform is the silver bullet for the problems generated by the failure of a company which is exposed to claims arising from the non-fulfilment of its environmental obligations. The limited capacity of the UK insolvency regime to facilitate the fulfilment of a debtor company’s environmental obligations is often illustrated with reference to some significant judicial decisions. However, no real picture has emerged of the frequency with which these issues arise, based on which firm proposals for reform could be advanced. This paper argues that greater regard should be paid to existing mechanisms which provide a means of enabling insolvency risks to be managed or minimised because these point towards the scope for these issues to be resolved through the environmental protection framework rather than through reliance on company and/or insolvency law. Design/methodology/approach Research was conducted into the statutory and non-statutory regulations (such as statutory guidance) and case law principles, which underpin the treatment of the claims against an insolvent (or potentially insolvent) company resulting from its environmental activities. This included research into policies which have a bearing on this area, developed through governmental and civic consultations and studies. Findings The paper concludes that the likelihood of a case for legislative reform being made out is weak, and the focus should accordingly shift to strengthening the effectiveness of existing law, policy and practice. Originality/value This paper is the first (in the UK context) to challenge the perceived need for reform in this area, engaging with recent examples of such corporate failures and the impact of recent legislative and policy developments.
This paper studies recent developments in Australian and US law permitting compensation for defrauded investors. For insolvent companies, these developments have drawn attention to the possibility of investor claims being satisfied on parity with the claims of ordinary unsecured creditors. This paper proposes that such a shift may be justified on the basis of a modern perspective of the principles underpinning corporate law. However, account must also be taken of the more practical implications which may hinder a widespread acceptance of parity.
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