3 - Convergence, Divergence and Diversity in Financial Law: The Experience of the UNCITRAL Model Law and Cross-Border Insolvency

Summary

Godwin’s chapter considers the experience to date of convergence in the area of financial law and, specifically, the UNCITRAL Model Law on Cross-Border Insolvency (‘Model Law’). In particular, the chapter examines the factors that prevent convergence in the area of financial law or, to put it differently, the factors behind divergence. It is suggested that through an examination of these factors, it is possible to assess the practicalities – and the relative merits - of convergence. Such an examination also offers insights into the appropriateness of mechanisms that might be used to achieve convergence and the extent to which the mechanisms need to be tailored to the particular circumstances or legal terrain. The experience of the Model Law shows that full convergence in law (in terms of absolute uniformity) is neither realistic nor practicable and that there is a need to accept a degree of divergence in law between jurisdictions. It also suggests that divergence in law is not a negative as it often leads to convergence in outcomes. Further, divergence – or diversity - is positive if it achieves convergence in outcomes that could not otherwise be achieved as a result of fundamental differences between national legal systems.