An analysis of the justification of the stringent natural person insolvency law system in South Africa in light of the "advantage to creditors" requirement

Abstract

The dissertation considers the justification of the stringent natural person insolvency system in light of the “advantage to creditors” requirement. Jackson’s (The Logic and Limits of Bankruptcy Law (1986) 3) criteria of “what is being addressed” by the South African natural person insolvency law system, and why that which is being addressed, is a “proper concern” of the South African system, is used as to assess the system. It is established that the South African natural person insolvency law system is a system which favours the protection of the interest of creditors. The international trend towards more debtor-orientated insolvency law systems, has become the topic of academic discussion, with the South African insolvency law system harsh criticised for not developing in line with this trend. It can be safe to state that academics, in analysing the South African insolvency law system, have discovered a “problem” with the South African system and are approaching their insolvency analyses by viewing the South African system as conflicting with or overriding some social or economic goal due to the fact that it has not necessarily developed in line with the international systems. In terms of the criteria established by Jackson for insolvency analyses, it can be argued that this approach is fundamentally flawed. The analysis in this dissertation is not undertaken for the purpose of identifying discrepancies or differences between the South African system and other natural person insolvency law systems found in foreign jurisdictions, but rather for the purpose of analysing the South African system against criteria distinctive to the purpose of its creation. Accordingly, to proceed with this analysis, one has to applying Jackson’s criteria and identify “what is being addressed” and why that which is addressed is a “proper concern” of the natural person insolvency law in South Africa. Against this background, it is possible to analyse the stringent South African natural person insolvency law system in light of the “advantage to creditors” requirement in a sound manner.