The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 received Royal Assent last week and became law: see here. A copy of the Act is available here or here (pdf). Amongst other things, the Act extends the investigatory powers of the Insolvency Service to the directors of dissolved companies.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill received its first reading in the House of Commons today. A copy of the Bill, as introduced, is available here (pdf).
The accompanying explanatory notes - available here (pdf) - explain that the purpose of the Bill is to address "public concerns about the abuse of limited liability, by extending the powers of the Secretary of State and, in Northern Ireland, of the Department for the Economy to investigate the conduct of company directors to include former directors of dissolved companies, to commence disqualification proceedings against them where public interest criteria are met, and to seek compensation where their conduct has caused loss to creditors". Earlier this month judgment was given by ICC Judge Prentis in Secretary of State for Business, Energy And Industrial Strategy v Eagling [2019] EWHC 2806 (Ch). The case is important because it is the first to consider an application by the Secretary of State for a compensation order under sections 15A and 15B of the Company Directors Disqualification Act 1986. AJudgment was given today in Rwamba v The Secretary of State for Business Energy And Industrial Strategy [2019] EWHC 2669 (Ch). The unusual facts of the case make it noteworthy: an application for permission to act as a director, under section 17 of the Company Directors Disqualification Act 1986, by a director previously disqualified for breaches of an order under section 17. ICC Judge Prentis stated (para. [31]):Permission given to one who has already been disqualified twice, and the second time for breach of an earlier permission, carries with it the unavoidable additional risk that the disqualification regime is perceived as lax and permissive, a perception which would lead to a lowering of corporate standards contrary to a purpose of the Act. So, the reasons in favour of permission are going to have to be that the more cogent if it is to be granted".Permission to act as a director was not granted: while the reasons advanced for permission were regarded as legitimate, ICC Judge Prentis found the evidence "simply too fragile to ascribe them much cogency" (para. [72]). The required full explanation for why permission was sought, with relevant corroborative evidence, was not provided. To grant permission in such circumstances, the judge stated, would be "an undermining of the public protection policy within the Act" (para. [72]).
The Insolvency Service reports that, in 2018/19, there were 1,242 director disqualifications and that, since April 2014, the average length of disqualification is 5.7 years: see here.
The Treasury has published a consultation paper seeking views on the key policy considerations that will shape the design of the new Banking Executive Accountability Regime: see here (pdf). The purpose of the new regime is to enhance the responsibility and accountability of authorised deposit-takers and their directors and senior executives. The consultation seeks views on a range of matters including the institutions and individuals to be covered by the new regime.
The Competition and Markets Authority has secured its first disqualification of a company director for a competition law infringement: see here. The individual was managing director of a company that operated online and used automated repricing software to implement an illegal cartel.
An important decision on the making of disqualification orders and restriction orders was given by the Irish Court of Appeal last month in Director of Corporate Enforcement v Walsh [2016] IECA 2. At first instance, the trial judge (Barrett J., in [2014] IEHC 365) was asked to make such orders against several individuals but declined to do so. The Director of Corporate Enforcement appealed, arguing that the trial judge was in error in not making the orders and had also made in his judgment several statements that created undesirable confusion in the context of corporate regulation.
The judgment of the Court of Appeal was delivered by the President of the High Court, Mr Justice Peter Kelly, sitting with Justices Mary Irvine and Gerald Hogan. The President held that case was one where the discretion not to make a disqualification should be exercised; it was, however, a case where restriction orders, for a period of five years, should be made. 
The Law Reform Commission has recently published an update on its current work programme, including its project on directors' duties: see here (pdf). The Commission states that it plans to publish a consultation paper discussing, amongst other things, directors disqualification and indemnification. It also notes that the majority of those responding to its consultation last year on the codification of directors' duties were against any form of codification.
The Small Business, Enterprise and Employment Bill received Royal Assent yesterday: see here. A copy of the new Act - the Small Business, Enterprise and Employment Act 2015 - is available here (pdf). An explanatory memorandum for the Act is not yet available but fact sheets were published yesterday by the Department for Business, Innovation and Skills in order to provide more information about the changes being introduced: see here.The UK Parliament was opened yesterday, for the final session of the current term, by The Queen. The Queen's speech sets out the Government's legislation programme for the final session. The proposed Small Business, Enterprise and Employment Bill will (amongst other things) provide for the establishment of a public register of company beneficial ownership and make changes to the regime for the disqualification of directors. Consultation on these proposals has already taken place: see here.
The ICLR has provided a summary for the recent decision Feld v Secretary of State for Business, Innovation and Skills [2014] EWHC 1383 (Ch), a case concerning the interpretation of an order granting a disqualified company director permission to act as a director, in circumstances where the director had been involved in the drafting of the order: see here.
The summary's headnote reads: "The principles of contractual interpretation could also be relevant to interpretation of a court order. Where a court order was to be applied to a person who had had a hand in drafting the terms of the order, the court should be entitled to have regard, as part of the exercise of construing the order, to what that person could reasonably have been thought to have intended in drafting the order in a particular way, as far as that might be objectively determined on the basis of the evidence presented to the court".
The Government has published the actions it proposes to take following consultation on its transparency and trust discussion paper: see here (pdf). The proposals include the creation of a registry of company beneficial ownership information, supported by a new obligation on all companies to identify significant beneficial owners (those with shares, or voting rights, providing an interest greater than 25%). The register will be held at Companies House and will be publicly available. All companies, on incorporation, will be required to provide an initial statement of beneficial ownership.Although no formal announcement has been made on the website of the Department for Business, Innovation and Skills, it is being reported in the media that the Government will be introducing changes to the directors' disqualification regime: see here (BBC News) or here (The Guardian newspaper). The Government sought views on possible changes last year in its discussion paper Company ownership: transparency and trust.
The Committee of Public Accounts, in its interim report on the stabilisation measures adopted in respect of the banking crisis, has called for a review of of the framework governing the investigation of directors suspected of wrong-doing, arguing that streamlining is required. The Committee has also called for a review, to be undertaken (it is suggested) by the Law Reform Commission, of the enforcement mechanisms available against individuals.The Court of Appeal gave judgment yesterday in R. v Hollier & Anor [2013] EWCA Crim 2041 and upheld the sentences imposed by the trial judge for fraudulent trading.
The Lord Chief Justice's report was published at the end of August: see here (pdf). It is noted therein that the Bankruptcy and Companies Court Users Committee has drafted two new Practice Directions - one on insolvency proceedings and one on the Company Directors Disqualification Act 1986 - that are to be implemented in 2013.
The Department for Business, Innovation and Skills today published a discussion paper titled Transparency and Trust - Enhancing the transparency of UK company ownership and increasing trust in UK business: see here (pdf). The paper contains many proposals and views are sought on seventy two questions across the following areas: establishing a central register of beneficial ownership; bearer shares; nominee directors; corporate directors; the duties of bank directors; financial redress for creditors; and directors' disqualification (including the power of regulators to seek a director's disqualification). The paper also notes that in the autumn a further consultation paper will be published setting out proposals to simplify the filing requirements for all companies.
The European Commission has begun a consultation seeking views on the need for, and feasibility of, harmonising certain aspects of insolvency law: see here. The consultation is part of work the purpose of which is to develop a rescue and recovery culture across the Member States. Amongst the questions on which the Commission seeks views are several concerning the duties, liability and disqualification of company directors.
Lord Malcolm, in the Court of Session (Outer House), gave his opinion today in HM Secretary of State For Business, Innovation and Skills, Re A DISQ Order in Terms of the Companies Directors Disqualification [2013] CSOH 86. He held that a director should be disqualified from acting as such for a period of two years and rejected the argument that her conduct, which was not dishonest, was insufficient to justify disqualification. The director had, over a period of 18 years, left the management of the company's affairs to her husband and had failed to discharge her responsibilities. Lord Malcolm stated (paras. [17] and [19]): "If someone accepts a directorship and then abdicates all responsibility for the affairs of the company, on any common sense view they have demonstrated unfitness for the office to a high degree ... The public interest demands that directors of companies take an active interest in the affairs of the company, and are mindful of their personal responsibilities for the proper running of the business".
