Correspond with the Insolvency Service about your role as a director
The Insolvency Service are tasked with investigating complaints about the conduct of director conduct following the insolvent liquidation of a company. If you are a director of a company having gone into insolvent liquidation the liquidator may have have filed a D1 report to the Insolvency Service expressing their concerns about directors conduct in the management of the company. If the Insolvency Service receive a D1 report from the liquidator that will then spark an investigation.
FAQs
If the liquidator of an insolvent company files a D1 report with the Insolvency Service about your conduct whilst acting as director of that company it will most likely cause the Insolvency Service to open an investigation about your role as a director.
You can expect the Insolvency Service to write to you with a Questionnaire asking you about every aspect of management of the company and what your precise role in the management of the company was. It is crucial that you obtain specialist legal advice from solicitors who are experts in company directors disqualification laws and procedures so as to give you the best chance of getting the most favourable outcome.
Whilst it is not mandatory to complete the Questionnaire the Insolvency Service and Official Receiver have a range of powers to compel you to answer questions in the form of a Public Examination. It is imperative that a skilled lawyer specialising in director disqualification laws is on hand to assist you navigate the Directors Questionnaire.
It is crucial that your “side of the story” is communicated effectively to the Insolvency Service. This means conveying all of the points in your favour and mitigating in so far as possible any issues that may be perceived as damaging. You must remember that at the point the Insolvency Service send you a Questionnaire they will only have the concerns raised by the liquidator in the D1 Report and perhaps select documents.
The short answer to that is yes. Your lawyer needs to understand the extent of director duties in the performance of their functions as directors and the powers and procedures of the Insolvency Service. Only with that knowledge can you hope to achieve the outcome you want.
The Insolvency Service have traditionally operated a policy to offer to disclose draft affidavits and all supporting evidence at the time that a section 16 letter is issued. That policy is informed by the nature of disqualification proceedings in that they are proceedings brought in the public interest.
A sequence of case authorities have established that the Insolvency Service ought to prosecute disqualification cases with fairness as a paramount consideration in ways that are different and more onerous for them than regular private civil proceedings. In short it ought to be possible to fully understand the Insolvency Service’s case well before there are any court proceedings.
A sequence of case authorities have established that the Insolvency Service ought to prosecute disqualification cases with fairness as a paramount consideration in ways that are different and more onerous for them than regular private civil proceedings. In short it ought to be possible to fully understand the Insolvency Service’s case well before there are any court proceedings.
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In deciding what your objectives are they will be formed by some of the following considerations:
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How much will these company director disqualification investigations and proceedings cost?
Will you be asked to pay the costs of the Insolvency Service as part of the company director disqualification investigation or proceedings?
What is the strength of the evidence against you?
Are you able to obtain your own evidence to rebut the Insolvency Service claims?
How long is this all likely to take?
What is the risk that you will face a Compensation Order claim or separate Insolvency Practitioner claims such as misfeasance proceedings?
What happens at your first meeting?
In our first meetings with you Stephen Chinnery and his team of specialist insolvency solicitors will work through these issues and devise a a litigation strategy that aims to hit your objectives. Because our team has years of experience in dealing with company director disqualification claims we will be able to work on agreed portions of work at fixed fees if the matters are sufficiently clear. All of this will give you the peace of mind to understand what this investigation or claim is likely to cost.
