Director Disqualification

By accessing expert guidance, damage can be minimised and costs reduced. Our expert team are here to advise and support you through any of the following:

• investigations into your company and your conduct
• responding to notice of intention to seek disqualification
• defending a claim for your disqualification as a director
• negotiating an undertaking to be disqualified
• seeking permission to act as a director of specific companies notwithstanding disqualification
• enforcing the costs awarded to you following your successful defence of disqualification proceedings
• claims brought against you by an administrator or liquidator (see other Director Services)

We offer assistance nationwide but our practice is mainly based in Norwich, which enables us to keep costs lower than many of our competitors.

Returns and D Reports

The directors of any company which enters into Administration or Insolvent Liquidation will be the subject of a D Return or a D Report submitted to the Insolvency Service by the Administrator or Liquidator. A D Return will confirm that there is no evidence of misconduct. A D Report will set out misconduct discovered by the Administrator or Liquidator.

Investigation

Following receipt of a D Report the Insolvency Service will decide whether to target the case for further investigation and will report this to the Insolvency Practitioner who made the Report. It is important to respond carefully and properly as the response will determine the decision whether to pursue disqualification and your responses may be produced in evidence.

Pre-action

If the Insolvency Service consider it to be in the Public Interest that a director be disqualified then they will issue notification to that effect (sometimes referred to as the ‘Section 16 letter’) and set out the grounds on which disqualification is to be pursued, it is important to respond comprehensively. More often than not it will be your first opportunity to respond to the allegations made against you and to put your side of the story. In our experience a well prepared response can change the mind of the Insolvency Service or result in a lower period of disqualification being pursued.

Disqualification Undertaking

If you choose to give a Disqualification Undertaking before court proceedings are issued you will usually secure a discount on the period of disqualification that the Insolvency Service was going to seek and avoid having to pay the costs of the Insolvency Service. It is advisable to seek expert assistance in negotiating the period and terms of your Undertaking.

Disqualification Proceedings

During proceedings there are key case management steps that you should not avoid:

• You must file an Acknowledgement of Service of the claim within 14 days of receiving it and send a copy to the Insolvency Service

• You must file and serve your evidence responding to the claim within 28 days of receiving the claim unless you

Disqualification Order

If the Court determines that you should be disqualified as a Director it will order that you be disqualified for a period of between 2 and 15 years. Unless the Court Orders otherwise, disqualification commences 21 days after the Order is made. If you are a director of other companies and need to continue to be involved in their management or require an extended period of time to put in place adequate succession arrangements, it is possible to obtain the permission of the Court to continue as a director.

Appeal

It is possible to appeal a Disqualification Order. The proper presentation of your original case will be essential to any appeal and you should seek expert advice and assistance if you are considering an appeal.

Use of a nominee or stooge - don’t do it

It is not uncommon to see family members of a disqualified director being appointed to act in place of the disqualified director. This is risky not only for the disqualified director but also for the nominee who will be personally liable for all debts of the company incurred whilst they acted on the instructions of the disqualified person if they knew that person was subject to disqualification. If you need to continue acting as a director or in the management of a limited company despite disqualification you should seek the permission of the Court to do so.