CLP - Justice Driven Insolvency Law: A Normative Theory

Speaker: Dr Bolanle Adebola(University of Reading)

Chair: Lord Justice Zacaroli (Tax and Chancery Chamber President)

This lecture responds to a longstanding challenge posed by the communitarian theory of insolvency: to interrogate the normative foundations of insolvency law and its dominant theories, and to elucidate more fully the values and assumptions that underpin the field. Gross, the leading communitarian theorist, contended that both the creditors’ bargain theory (CBT) and values-based approaches failed to articulate the philosophical basis of their claims, thereby leaving the field without a fully developed account of its normative foundations.

The CBT grounded its normative claim that the sole purpose of insolvency is to enable efficient debt collection in economic liberalism without articulating its broader values and implications. Though the values-based approach also rejected this narrow framing, arguing that insolvency law is shaped by multiple purposes and values, its best-known proponent, Warren, offered an empirical rather than normative theory of insolvency. Thus, although both leading theories offered alternative accounts of insolvency law, they failed, as Gross has argued, to engage with the philosophical roots of their own claims and their embedded implications. Gross’ communitarian theory, by contrast, self-consciously proposed a normative approach that included the debtor, its creditors and the public, arguing that insolvency law reflects the choices that society makes about how to treat failure in credit-based economics.

Fully engaging with Gross’ challenge, this lecture unpacks the philosophical roots of the three dominant insolvency theories, arguing that each is a theory of social cooperation, marked by both an identity of interests and conflict. Where conflict exists, fairness is engaged; and in social contexts, fairness becomes a question of social justice. Accordingly, the lecture advances two key claims. First, that each dominant insolvency theory implicitly professes a theory of social justice, though these remain neither fully articulated nor critically theorised. Second - and more importantly - that social justice is therefore not simply one value among others but the foundational and organising value of insolvency law. The lecture concludes by offering a Rawlsian account of social justice as a viable normative foundation for the field, and as a principled model for shaping both its doctrine and institutional design. Its insights are particularly relevant as the field seeks new theoretical groundings for the next generation of insolvency reform.

Bolanle is an Associate Professor of Law at the University of Reading, where she specialises in International Commercial Law. Her primary research focuses on the development of justice-based corporate rescue systems that balance stakeholder interests while preserving viable, yet distressed, businesses within the economy. She employs socio-legal, comparative, and empirical approaches and has made significant contributions to academic, policy and reform debates in both developed and emerging economies. Her research has been supported by the Arts and Humanities Research Council (AHRC), the Global Challenges Research Fund (GCRF), and the British Council.

Bolanle is the founder and convener of the Applied Commercial Law Research Hub (ACLRH); the 1st Vice President of the Restructuring and Insolvency Committee of the Nigerian Bar Association's Section on Business Law (NBA-SBL); a council member of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN); and a member of the National Assembly Business Environment Roundtable (NASSBER). She is also an academic member of INSOL International, the Insolvency Lawyers Association, and a Chartered Member of the Chartered Governance Institute (CGI). In addition, she serves as an editor for the Encyclopaedia of Banking Law (Insolvency Division) and reviews grants for the AHRC.

The Current Legal Problems (CLP) lecture series and annual volume was established over fifty five years ago at the Faculty of Laws, University College London and is recognised as a major reference point for legal scholarship. Sign up for the mailing list to receive emails about Current Legal Problems lectures

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