Debate contribution: Insolvency (Amendment) Bill: Second Stage

Debate contribution by Dr Caoimhe Archibald on 1 July 2025.

MLA

Dr Caoimhe Archibald

Party at the time

Sinn Féin

Date

1 July 2025

Type

Debate contribution (made as a minister)

Business

Executive Committee Business

Heading

Insolvency (Amendment) Bill: Second Stage

Assembly identifier

Official Report component 5061435

Read the official Assembly record

Text

I beg to move

Go raibh maith agat, a Leas-Cheann Comhairle.

Members will be aware that I and my Department are working towards an economic vision aimed at creating good jobs, increasing productivity and promoting regional balance and decarbonisation. While perhaps not as high profile as those areas, our insolvency system remains fundamental to the operation of a healthy, stable and fair economy. Whilst our economic performance is positive and has been improving over recent years, companies can still fail for a variety of reasons. As well as shifting markets and unexpected global crises, local businesses face challenges in trying to operate profitably. During my time as Finance Minister, my Department commissioned the Ulster University's Economic Policy Centre to carry out a study on the cost of doing business for local companies. That report illustrates the financial challenges that face all businesses here, particularly those associated with recent increases in National Insurance contributions and the rise in the national minimum wage. In addition and as I highlighted recently at the Energy Ireland conference, stubbornly high energy costs cause significant challenges for households and businesses. Those factors, along with the rising costs of other essentials such as raw materials, transport and insurance, are having a negative impact on the bottom line of many local businesses. Therefore, when companies or individuals encounter financial difficulties, how we respond has significant implications not just for those directly involved but for the economy as a whole. A well-functioning insolvency system helps to preserve value, reduces uncertainty and allows capital and talent to be reallocated efficiently.

It is a silent but vital enabler of confidence in investment, lending and entrepreneurship. For employees, it offers clarity, legal protections and access to compensation; for creditors, it ensures fair treatment; and for the economy, it promotes dynamism and resilience.

My Department's insolvency framework is not static. It evolves in response to new challenges, and it balances the competing interests of creditors, debtors, employees and wider society. Our legislation requires regular updating if it is to remain relevant and continue to serve its purpose efficiently. That has been illustrated over the years with the focus of corporate insolvency legislation now aimed at the rescue and restructuring of failing businesses where possible rather than liquidation. Similarly, for individuals in financial distress, bankruptcy law has moved away from the punishment and stigma of previous times. It is now aimed at relief and rehabilitation so that individuals can rid themselves of problem debt and move forward with their lives. The contents of the Bill represent a further evolution of our insolvency system. It does not make major changes to legislation, nor does it introduce radical new provisions. However, its provisions will have a practical impact on our insolvency laws, modernising them and making them more efficient, removing procedures that have become redundant or outdated, and easing the burden for creditors and petitioners. Given the breadth and diversity of the proposed amendments — there are 29 in all — it would be impractical to provide a succinct and detailed summary of them. However, I will give a brief outline of a few of the most significant measures in the Bill. When a business falls into financial distress, often the best outcome for everyone, especially creditors and employees, is to keep that business running. However, businesses cannot keep operating if essential supplies such as gas, electricity or water are cut off. That is why the Bill gives my Department new powers to ensure that suppliers of essential services must continue to provide them during insolvency proceedings. We are updating the definition of "essential services" for modern times. The Bill will therefore guarantee that IT services are protected so that businesses can keep their digital services running while efforts to restructure or rescue them continue. Another goal of the Bill is to put creditors at the heart of the process and make it easier for them to have their say. At present, all meetings of creditors must be held in person. That often makes it difficult for them to take part, especially if they live in remote areas or outside this jurisdiction. The Bill will allow creditors' meetings to be held online so that they can participate in the decision-making process from wherever they are. In addition, insolvency practitioners will not need to hire venues for meetings, thereby saving time and money for everyone involved. We are cutting through unnecessary red tape. Currently, all creditors, no matter how small their claim, must submit a proof-of-debt form for their debt to be considered for payment. That can be an obstacle, particularly for those who are owed small amounts. The Bill will introduce a more practical solution: creditors who are owed smaller sums will be eligible for payment automatically without needing to file a claim. That small but significant change will make the process quicker, simpler and more accessible. We are giving insolvency practitioners greater flexibility. Sometimes, there is a valid reason to take legal action to recover money for the company. However, the risk of losing and facing high legal costs can be a deterrent. Under the new rules, administrators and liquidators will be able to assign the right to pursue those legal actions to third parties, often creditors themselves. In that way, the business can raise funds without taking on the risk, and creditors can still benefit from successful claims. Taken together, the reforms ensure that our insolvency and director disqualification laws remain effective, agile and fit for purpose in today's fast-moving world. The Bill's provisions are practical, timely and widely welcomed within the profession. They will serve creditors, debtors and practitioners efficiently and fairly. Therefore, I am pleased to commend the Bill to the Assembly.

950 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 12:58 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification