New director disqualification crackdown proposals announced by Vince Cable.
Vince Cable announced measures to tighten up the law on Director Disqualification on 22nd April 2014.
The proposals from Vince Cable’s Department for Business, Innovation and Skills, if passed by Parliament, could see Company directors convicted of offences overseas being disqualified from serving as directors on the boards of UK companies. In addition, the courts could also be given the power to force disqualified directors to pay compensation to those who have lost money as a result of their actions. The proposals are expected to be debated in spring 2015.
In announcing the intended measures, Vince Cable said:
“The vast majority of directors in this country run their businesses in the right way. But some people have suffered unnecessary losses as a result of rogue behaviour. These measures will protect the British economy and our reputation as a good and fair place to do business by disqualifying directors who have already been convicted of offences overseas from running British companies.
Rogue directors can cause a huge amount of harm in terms of large financial losses, unnecessary redundancies and lifelong investments going down the drain. It is only right that we should put the toughest possible sanctions in place, make sure we stamp out unfair practices and deter those who are looking to act dishonestly.”
Other proposals in the proposed legislation include:
- Allowing the government to intervene and ask courts to award compensation against a disqualified director to return money to victims,
- Changing the director disqualification law so judges have a duty to take into account a wider range of matters when considering whether to disqualify an individual director. These matters would include any previous business failures, the nature of any losses, overseas conduct and breaches of specific laws.
What could this new Director Disqualification legislation mean to our clients?
Advising our clients on how to solve problems associated with Director Disqualification proceedings is one of our main specialisms at NDP. The team at NDP, headed by Neil Davies is fully aware that Director Disqualification is currently an area of real concern for creditors and the insolvency profession.
Our team comprises Solicitors who have worked for the Insolvency Service and have acted for and against the Insolvency Service. This means that in matters of Director Disqualification, we know what the Insolvency Service wants, what the best solutions are for our clients and how to achieve them.
We look forward with interest to the outcome of this proposed new legislation. Whatever the outcome is, however, our advice to clients with Director Disqualification problems will remain the same: contact us early for a FREE initial consultation to maximise your options.