EUlaw - EARN Network

Next stage of European insolvency law harmonisation has come into force

Berlin, Germany, 19th June 2026

On 10 March 2026, the European Parliament approved the EU Directive on the harmonisation of certain aspects of insolvency law by a majority vote; the Council gave its approval on 30 March 2026, and EU Directive 2026/799 was published in the Official Journal of the European Union on 1 April 2026. The aim of the Directive, which finally entered into force on 21 April 2026, is to ensure that insolvency proceedings are conducted more efficiently across Europe, that assets can be traced and realised more easily, and that the proceeds generated during the proceedings are distributed fairly amongst creditors.

Key provisions

All provisions relevant to creditors from the original draft are included in the version now adopted:

Micro-enterprises (Article 4(5))

Instead of the detailed provisions originally envisaged, the Directive now contains only a single paragraph in Article 4, which reserves the right for Member States to retain or introduce simplified liquidation proceedings for micro-enterprises.

Insolvency avoidance actions (Articles 6–13)

The provisions on insolvency avoidance actions are modelled on the existing legal framework in countries with a strong tradition of such actions, such as Germany and Austria. This will put an end to the fundamental restrictions – some of which are considerable, such as those applicable to enforcement measures in the Netherlands, the Czech Republic and Spain. However, Member States retain considerable discretion in the detailed implementation of their respective laws on avoidance.

Asset Tracing (Articles 14–20)

The facilitated access to bank account and asset registers to be established by Member States can significantly improve the Europe-wide tracing of debtors’ assets and thus strengthen creditors’ actual chances of realising their claims.

Pre-pack mechanism (Articles 21–39)

The concept of the pre-pack procedure, which also features in the Directive and originates from the Netherlands, is intended to allow the sale of a company to be negotiated with a potential purchaser even before insolvency proceedings are opened, so as to enable the takeover to take place immediately after the proceedings are opened.

Creditors may be particularly affected by the de facto obligation to enter into contracts: Contracts essential to the continuation of the business are generally to be transferred to the purchaser without the consent of the affected contracting party being a prerequisite.

Duties of directors (Articles 40–43)

The adopted text does not establish a uniform obligation to file for insolvency, as exists in Germany, for example, but rather a flexible minimum standard. Although directors are generally required to take action within a maximum of three months in the event of insolvency, Member States are free to define the concept of insolvency, the threshold and even alternatives to filing a petition – such as notifications to the register or other measures to protect creditors – themselves.

Creditors’ committees (Articles 44–50)

The provisions on creditors’ committees are modelled on German law. Under these provisions, creditors are to be granted a greater say in the proceedings through the possibility of forming such committees. At the same time, this enables insolvency practitioners to reduce their liability risk by involving potential future claimants in decisions relevant to liability during the proceedings.

Transposition into national law

The step that will ultimately determine the respective national insolvency practice is still pending in the Member States: As a directive, the legal act must be transposed into national law by 22 January 2029. Only then will the new provisions take effect in the individual Member States.

The EARN members will be keeping a close eye on developments.

Read on here for a more detailed analysis from a German perspective

Author: Lutz Paschen, PASCHEN Rechtsanwälte, Berlin, Germany

ESG Obligations for Directors: How Dutch Law Is Responding to the European Green Turn

Enschede, Netherlands, 16th April 2026

The past few years have fundamentally changed what it means to be a corporate director in Europe. Once largely a matter of voluntary commitment, environmental, social and governance (ESG) considerations are rapidly becoming a source of hard legal obligations and, increasingly, of legal liability. The Netherlands offers a compelling case study of how a civil law jurisdiction is grappling with this shift.

The Regulatory Foundation

The Corporate Sustainability Reporting Directive (CSRD), which entered into force in January 2023 and is being phased in from financial year 2024 onwards, requires large companies and listed SMEs to disclose detailed sustainability information in accordance with the European Sustainability Reporting Standards (ESRS). For Dutch companies, this means that sustainability reporting is no longer a footnote in the annual report but a core compliance obligation embedded in the annual report under Dutch financial reporting law.

Alongside the CSRD sits the Corporate Sustainability Due Diligence Directive (CS3D), adopted in 2024, which goes a step further: it requires companies above certain thresholds to identify, prevent, mitigate and remedy actual and potential adverse impacts on human rights and the environment across their operations and value chains. Member States, including the Netherlands, must transpose the CS3D into national law, with the first companies falling under its scope from 2027 onwards. Dutch implementation legislation is currently in preparation.

What Does This Mean for Directors?

Under Dutch law, the board of directors bears collective responsibility for the management of the company, including compliance with applicable law (art. 2:9 Dutch Civil Code DCC). As ESG obligations become statutory requirements rather than soft-law commitments, the question of director liability sharpens considerably.

Two liability routes are particularly relevant. First, internal liability towards the company itself under art. 2:9 DCC: a director who fails to ensure that the company complies with mandatory ESG reporting or due diligence obligations may be held liable for the damage that results, provided the failure constitutes a serious reproach. Dutch courts have interpreted this standard consistently: a director is not liable for every management error, but deliberate non-compliance with a statutory obligation will generally meet the threshold.

Second, external liability towards third parties under art. 6:162 DCC (tort). Here, the landscape is still evolving rapidly. The landmark Milieudefensie v. Shell judgment (District Court of The Hague, 2021), in which Shell was ordered to reduce its CO₂ emissions by 45% relative to 2019 levels by 2030, demonstrated that Dutch courts are prepared to impose concrete obligations on companies and, by extension, on the boards responsible for executing them on the basis of the unwritten duty of care anchored in tort law. Although the Court of Appeal partially reversed this ruling in November 2024 on the specific reduction target, the principle that companies owe a duty of care to society in respect of climate change was upheld.

The Director’s Dilemma: Shareholder Value vs. Stakeholder Interests

Dutch corporate law has long recognised that directors must act in the interests of the company and its affiliated enterprise, which under settled case law of the Dutch Supreme Court includes the long-term interests of a broader group of stakeholders. This gives Dutch directors a meaningful degree of flexibility to pursue ESG objectives even where short-term shareholder returns may suffer. The flip side is that this same framework imposes a positive duty to take material ESG risks seriously as part of sound governance.

The tension becomes acute when activist shareholders push for short-term distributions while ESG-related litigation risks loom on the horizon or when a director must decide how much weight to give to a sustainability target that has not yet been hardened into a statutory obligation.

Practical Implications

For directors and their advisors, the key takeaways are threefold. Governance structures should be reviewed to ensure that ESG oversight is clearly allocated at board level, whether through a dedicated committee or explicit task division among executive directors. Documentation matters enormously: where a director has genuinely deliberated on ESG risks and made an informed decision, the defence against a claim of serious reproach is considerably stronger. And the value chain dimension of the CS3D means that directors must look beyond their own operations / contractual arrangements with suppliers and business partners will need to reflect the new due diligence obligations.

A European Conversation

What makes this topic particularly interesting for an international audience is that the underlying legal framework is European. The CSRD and CS3D apply across the EU, and while the details of director liability remain governed by national law, the core obligations are the same from Amsterdam to Warsaw and from Stockholm to Rome. Cross-border transactions, joint ventures and group structures will increasingly require lawyers in different jurisdictions to speak the same ESG language and to advise their director clients consistently on where the liability risks lie. The Dutch experience, with its relatively mature climate litigation tradition and stakeholder-oriented corporate law, offers useful insight into where other jurisdictions may be heading.

Author: Mrs I.K.M. Hoffmann, Damste Advocaten, Netherlands