A New Era in Corporate and Personal Insolvency
In the realm of insolvency law, Jamaica embarked on a transformative journey with the
enactment of its modern Insolvency Act in 2014. This article explores the birth of Jamaica's
Insolvency Act, its objectives, and its place in the broader Caribbean context.
1. A Monumental Change in 2014
On the 31st day of 2014, Jamaica ushered in a new era by repealing its outdated Bankruptcy
Act and modernizing parts of its Companies Act. This monumental shift introduced the
(Jamaica) Insolvency Act, consolidating legislative provisions for both personal and corporate
insolvency. Accompanied by subsidiary legislation, the act established an insolvency division
within the Supreme Court of Jamaica and introduced Rules for Civil Procedure & Practice to
address insolvency court-connectivity issues.
2. The Objective of Jamaica’s Insolvency Act
Section 3 of Jamaica’s Insolvency Act lays out its fundamental objectives, emphasizing:
a. The rehabilitation of debtors and the preservation of
viable companies, all while safeguarding the rights of
creditors and other stakeholders.
b. Ensuring a fair allocation of the costs associated with
insolvencies while prioritizing the strengthening and
protection of Jamaica’s economic and financial system and
the smooth flow of credit within the economy.
3. A Regional Shift in Insolvency Legislation
Jamaica’s progressive approach to insolvency mirrors developments in the wider Caribbean
region. Trinidad and Tobago’s Bankruptcy and Insolvency Act of 2007 came into effect in 2014,
aligning its insolvency framework with Jamaica’s. Barbados, in 2001, also enacted the Bankruptcy
and Insolvency Act, which shares substantial similarities with Jamaica’s and Trinidad and
Tobago’s legislation, drawing inspiration from Canada’s Bankruptcy and Insolvency Act of 1992.
4. Canada’s Influence on Caribbean Insolvency Laws
Canada has played a significant role in shaping modern insolvency laws in the Caribbean.
Between 1869 and 1966, Canada introduced thirteen pieces of legislation to address personal and
corporate insolvency, culminating in the 1992 Bankruptcy & Insolvency Act. This
comprehensive framework, rich with case law, served as the model for Jamaica, Trinidad and
Tobago, and Barbados, eclipsing the antiquated insolvency laws of the United Kingdom, upon
which the Caribbean's old laws were based.
5. Equity and Corporate Rescue as Core Objectives
The common thread among these modern insolvency legislations is the emphasis on equity and
corporate rescue. They significantly curtail the once-unbridled powers of Receivers, ushering in a
new era where Receivers are expected to align with the objectives of debtor rehabilitation and
optimizing asset realization, particularly when company-rescue remains unattainable.
In conclusion, Jamaica’s Insolvency Act marked a pivotal moment in the Caribbean’s legal
landscape, reflecting a broader regional trend towards modernizing insolvency laws. These
legislative reforms prioritize fairness, economic stability, and the preservation of viable
businesses, paving the way for a more equitable and dynamic insolvency regime in the Caribbean.
