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In 1977, the Cork Committee was appointed to look into comprehensive reforms on
insolvency law. As a result of the report by the Cork Committee, a separate law, the
Insolvency Act 1985 was enacted, and on the very same day it was passed, the Act
was repealed and replaced by the Insolvency Act 1986. 79 Prior to the introduction of
the Insolvency Act 1986, the laws and procedures of corporate insolvency law
remained a part of Companies Act. The trend of having corporate insolvency law as
part of Company law legislation was followed in other Commonwealth countries
whose laws were derived from the English insolvency law, such as New Zealand,
Australia and Malaysia.
In 1998, the Labour Government launched a series of consultation documents by
Department of Trade and Industry in an attempt to reform the company law regime
in the UK. As a result of the commitment, a Steering Group was established to be in
charge of reviewing all aspects of company law and to recommend the new company
law legislation. The then company legislation was thought to be „patchwork‟
legislation, originating from the Victorian times and not suitable in the current
economy.
A Consultative Committee was appointed with the aim to create modern company
law for competitive economy and in order to achieve that, the law should facilitate
the operations of the companies so as to maximize wealth and welfare as a whole. 80
During the consultation stage, debate sparked between various respondents on the
possibility of advancing beyond the interests of members. The then existing
company structures reflect three purposes; firstly, company is formed for the benefit
of the shareholders subject to rights of existing and potential creditors: 81 secondly,
accounting and disclosure requirements act for the benefit of actual and future
79 Roy Goode Principles of Corporate Insolvency Law, (Sweet & Maxwell, London, 2005) at [1-06].
80 The Steering Group above n55 at [2.5].
81 Ibid, at [5.1.4].
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