Proprietary Restitution and Insolvency: International Approaches

Abstract

Proprietary restitution claims in insolvency contexts raise acute tensions between individual justice and collective distribution. This article provides a comparative analysis of how different jurisdictions address claims to trace and recover property or its proceeds from insolvent estates. It examines the availability and limits of proprietary remedies such as constructive trusts and equitable liens, focusing on their interaction with insolvency law principles, particularly the pari passu rule. Drawing on case law from common law jurisdictions and selected civilian systems, the article assesses whether courts have adopted coherent criteria for recognising proprietary restitution claims or whether outcomes remain heavily influenced by policy considerations. The article argues that while proprietary restitution serves important corrective functions, its unrestrained use risks undermining the integrity of insolvency regimes. It concludes by advocating a principled approach that recognises proprietary claims only where clear proprietary interests can be established, thereby preserving both restitutionary justice and insolvency policy.