Insolvency and Public Law

This chapter explores the complex and evolving relationship between insolvency law and public law in England, particularly in the context of companies delivering essential public services. While insolvency law traditionally prioritises creditor interests and market efficiency, public law emphasises service continuity, democratic accountability, and the protection of vulnerable stakeholders. The authors analyse how these normative tensions manifest in theory, legislation, case law, and practice, focusing on the underutilisation of special administration regimes (SARs) and the increasing reliance on ordinary insolvency procedures—especially liquidation—for restructuring in the public interest. Through detailed examination of high-profile cases such as Carillion, British Steel, Thames Water, and Baglan, the chapter reveals how insolvency law is often repurposed to serve short-term political goals (i.e., in the “private interest”), with limited regard for long-term public value. The authors argue for structural reform to better align insolvency procedures with public interest objectives, including enhanced oversight, clearer statutory mandates, and more effective enforcement mechanisms. Ultimately, the chapter calls for a reimagining of insolvency law as a tool not only for financial restructuring but also for safeguarding the common good whenever strategically important private entities operating in the public interest and market-based providers of public functions experience financial distress.