Her words and phrases may have reflected her eminence in the legal profession. But for people like me, they required a second and third reading for the translation process to work.
The occasion was a big meeting discussing bankruptcy and how to make it more palatable as a business option when things have gone south, and High Court Judge Jacqueline Cornelius seemed to feel the pain of those faced with the option.
The topic was Barbados’ Bankruptcy and Insolvency legislation Act which was passed nearly two decades ago, and is being updated and strengthened by the new Mottley administration to make it work, I guess, better.
The judge said that “In our strongly debt-averse, almost Calvinistic culture, business failure is still seen as a moral stain, and personal bankruptcy the sign of an unredeemable financial profligacy.”
Phew. Read that again if you need to. The judge said Barbadians want to pay their debts and have personal discipline in their financial affairs, and that explains why “financial reserve (is) a part of our psyche.”
And she also took a non-legal jump which I found interesting, to wit, that some Barbadians believe “that access to credit is primarily governed by class and race considerations.” So they believe, whether it is true or not, that some sections of the society are “better able to navigate the commercial landscape because of historical familiarity than others.”
But the larger point she was making, whether it was for the above reasons or other ones, was that companies too often seek less financing than they should, and start out seriously undercapitalised. And when they run into trouble their owners “seek help for their financial problems much too late.”
But Madame Justice Cornelius points out that life comes at you, as they say, fast. She told her audience that “For both human beings and companies, the vicissitudes of life may militate against a glowing financial success, without any moral failing on the part of the insolvent.”
The judge says that in this country there are few if any programmes to help people manage debt, far less to even understand and properly utilize it. She noted that the bankruptcy legislation currently in force aims to provide a streamlined regime “based on the concept of a fresh start and debtor rehabilitation.” It also aims to protect the interest of creditors in ways that are “not unnecessarily punitive or humiliating” (presumably to the debtors).
This approach can help attract higher levels of domestic and foreign investment “while a fresh start provided by bankruptcy legislation can offer a safety net that promotes entrepreneurship…”
But for reasons above my pay grade, since the passage of the Bankruptcy and Insolvency Act in 2002, Barbados continues to see “the grave impact of insolvency on our local landscape,” according to Minister of Small Business Dwight Sutherland, who told the same gathering what the new Mottley administration was trying to make it work better.
According to the GIS, he noted that in July Cabinet approved amending the Bankruptcy and Insolvency Act so that it fully “aligns with international standards” (no translation offered) and Parliament had passed the Supreme Court of Judicature (Amendment) Act, 2019 to establish a commercial court, which will handle bankruptcy and insolvency cases.
This, coupled with the recent installation of a number of new judges, he said, would strengthen the country’s insolvency regime.
In summary, he said, Barbados needed to have a low cost legal framework in place which allows “distressed businesses to pursue reorganization as a first option and emerge from insolvency proceedings as a going concern.” And, if reorganization is not possible, “then the procedures should facilitate the return of money to creditors,” he said.