Employment of Illegal Workers results in Director Disqualification

This is the next in the series of my blog for the Director’s Friend.

BACKGROUND

In a recent press release the Insolvency Service (‘IS’) show that they are targeting insolvent companies that have been employing illegal workers and where the fines levied by the Home Office were not paid. According to the press release 11 directors from separate companies were disqualified for employing a total of 39 illegal workers across various geographic locations in England.

Following visits from Home Office Immigration officers, during which the illegal worker breaches were discovered, the companies were issued with penalty notices ranging from £10,000 to £15,000 per worker, which remain unpaid. Across the companies talked about in the press release these unpaid fines totalled £450,000.

All 11 of the directors were directors of the companies and were in office at the time of the Home Office visit.

THE INSOLVENCY SERVICE COMMENTS

Cheryl Lambert, the Chief Investigator at the IS is quoted to have said:

‘Employing illegal workers is not a victimless crime. These directors sought an unfair advantage over their competitors by employing people under the radar who were not entitled to work legally in the UK.

If a company is found to be employing illegal workers and not carrying out the checks they are required to by law, then the Insolvency Service will take action to remove the directors from the market place, regardless of whether the company is in Liquidation or not.

This action is a warning to other employers to seriously consider their duties and obligations.’

FURTHER WARNING

A further warning is contained in the press release in circumstances where the company is still active and not subject to insolvency proceedings where the Insolvency Service and the Home Office are working very closely together.

THE WIDER PICTURE

An employer can be sent to jail for 5 years and pay an unlimited fine if they’re found guilty of employing someone whom they knew or had ‘reasonable cause to believe’ didn’t have the right to work in the UK. If that is a director of a company, then they could also be disqualified from being a company director in any event by the criminal court.

In addition, a civil penalty could be levied in the sum of £20,000 for each illegal worker employed.

So, employing someone who does not have the legal right to work in the UK could be very expensive, result in a prosecution and a director disqualification. In addition, a confiscation order could follow!

COMMENT

These kind of civil director disqualifications seem in my experience to be on the increase where the theme is that the company employs illegal workers, is caught by the Home Office and fined. The fine is not paid and the company is placed into formal insolvency. It would appear that it is as a consequence of the Home Office and the Insolvency Service working together to target these cases.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification by the IS please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me as a specialist director disqualification defence solicitor the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost. I am a game keeper turned poacher.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out or we can liaise with your insurers. Your work will be carried out by me or others under my close supervision. I am happy to come to you to take instructions. My firm is based in London and Hertfordshire, here in the UK.

YOUR ADVISER

Finally, is you advisor a practising solicitor (and thus insured to advise you – check with the SRA) and if so is your solicitor a full member of the Insolvency Lawyers Association (‘ILA’) (ask them). Membership of the ILA is a public mark from insolvency peers that your representative has the requisite knowledge, skill and experience to advise you. I am both. Accept no substitutes.

Until the next time…

THE DIRECTORS FRIEND

Posted in Blog / News, Business, Companies and Corporate, Employment | Leave a comment

10 Things that you should consider when faced with a Director Disqualification Investigation

This is the next in the series of my blog for the Director’s Friend.

When the Insolvency Service (the ‘IS’) write to you with perhaps a questionnaire or a ‘section 16’ letter there are a number of issues that you should consider:

  • You should never deal with the claim yourself as it is not as straightforward as it may seem. What you say could be used in evidence against you and undermine your objective. Always seek and obtain expert legal assistance – use their expertise to assist you and let them deal with any stress for you;
  • Never just ignore the letters – the investigation and any claim is not going to go away if you just ignore it. It may end up costing you a lot of money with no input from you;
  • Do not be rushed into a response to the IS within the usually short timescale that they give for a response. Always consider your response carefully with the assistance of experienced solicitors. The solicitors can usually seek and obtain an extension of time to respond on your behalf and take away the stress for you;
  • You should never respond to the questionnaire without taking experienced legal advice first. That is because you need to be able to fully identify what the IS are investigating and to respond in the right way;
  • You should never respond to the section 16 threat letter without requesting a copy of the evidence that has been prepared against you. You then need to carefully review the same with an experienced solicitor to formulate the right response;
  • You should always ask your solicitor to identify whether there is a risk of other claims being made against you or other investigations being carried out. The IS investigation is not always the only one in contemplation. You need to avoid accidentally prejudicing yourself;
  • Running another company in the background whilst disqualified as a company director (perhaps as a majority shareholder) – you may believe that you can do this. My advice is that you should never do this as the IS do check and you could be at risk of someone complaining to the IS that you are breaching the disqualification. Remember that the fact of your disqualification is made public. The criminal sanctions are draconian; you could be held personally liable for the company debts and you could be disqualified for a longer period of time;
  • Acting in the management of a company whilst disqualified – you may consider that you can take up another more senior role in the company without being an appointed director. This is not sensible without the right director disqualification legal advice to avoid the draconian consequences outlined above. I have been involved in a case before where the judge found that the disqualified director was acting in the management of a company by arranging that company’s mobile telephone contract;
  • Is a disqualification inevitable? No not always with the right advice; and
  • If you are disqualified from being a company director is that it – do you have to wait out your ban period before you can act as a director again. No – please talk to me about obtaining permission to act as a director even whilst disqualified.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification by the IS please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost. I am a game keeper turned poacher.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out or we can liaise with your insurers. Your work will be carried out by me or others under my close supervision. I am happy to come to you to take instructions. My firm is based in London and Hertfordshire, here in the UK.

Finally, is you advisor a practising solicitor (and thus insured to advise you – check with the SRA) and if so is your solicitor a full member of the Insolvency Lawyers Association (‘ILA’) (ask them). Membership of the ILA is a public mark from insolvency peers that your representative has the requisite knowledge, skill and experience to advise you. I am both. Accept no substitutes.

Until the next time…

THE DIRECTORS FRIEND

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Directors Duties when the Company may be or is insolvent – Be aware of personal liability stalking you!

This is the next in my series of blogs for the Director’s Friend.

In a recent decision of Terence Mowschenson QC sitting as a deputy High Court Judge in the case of Oakdene Homes PLC (In Liquidation) (the ‘Company’) and Carl Stephen Turpin dated 03 November 2016 the director of the Company in Liquidation was ordered to pay the total sum of circa £825,000.00.

That is a significant sum of money for a director of a company to find post that company’s liquidation. So, what happened?

BACKGROUND

The Company’ business was residential house building. In 2007 there was a sharp slowdown in the market for residential homes as a consequence of the financial crisis.

The judge found that the Company was insolvent from the end of 2007 to 23 January 2009 when it was placed into administration.

THE CLAIMS

The lead claim advanced against the director was for £750,000.00 for a call in respect of subscription monies due on a subscription of shares in the Company.

The judge found that the Company was short of cash in 2008. In about May 2008 the director agreed to subscribe for further shares for a consideration of £750,000.00. The judge referred to contemporaneous evidence where it was found that the shares had been allotted and the liability due from the director. The judge found that the director was liable to pay that sum.

A further claim was advanced by the director in the sum of £75,000.00 for monies that the judge found were simply a misappropriation of company monies to meet the directors’ personal liability to a bank. The judge found that the director had a fiduciary duty to safeguard company assets. He did not do so, therefore he was required to make good the assets as if he was a trustee and repay the monies.

A further claim in the sum of just over £5,000.00 was found to be owed by the director as a debt.

On the facts and the law the director’s counterclaims for set off and other claims were rejected.

A small crumb of comfort was allowed by way of the director’s counterclaim for a month’s unpaid salary, 12 week’s salary by way of wrongful dismissal and a redundancy payment.

ANALYSIS

Oddly the judgment does not set out the pleaded legal basis of the Liquidators claims. However, it is likely that they were for Misfeasance pursuant to section 212 of the Insolvency Act 1986. This is a fairly typical claim that directors of a company can face it that company has been placed into Administration or Liquidation to make them personally liable.

The Court may explore the conduct of a director and may via a Misfeasance claim compel the director to repay, restore or account to the company for any property or money (plus interest), or contribute such sum to the company’s assets by way of compensation in respect of the breach of duty as the Court thinks fit.

If the company is insolvent or financially distressed, an additional duty is imposed on the director to consider or act in the interests of creditors of the company (section 172(3) of the Companies Act 2006). However, that duty is owed to the company.

This is in circumstances where, as in this case, the judge found that the Company had been insolvent over a long period of time and that means that the director(s) of the company then have a duty to consider the best interests of creditors as a whole. These interests are paramount.

COMMENT

Particularly when the company is or may be trading insolvently the paramount consideration for the well-advised director is to consider the best interests of creditors. That protective advice should be sought from an accountant, a Licensed Insolvency Practitioner or an insolvency Solicitor to forestall an application by a subsequently appointed Administrator or Liquidator for Misfeasance to make you personally liable.

WHAT TO DO NOW?

If you are faced with a claim for Misfeasance please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out or we can liaise with your insurers. Your work will be carried out by me or others under my close supervision. I am happy to come to you to take instructions. My firm is based in London and Hertfordshire, here in the UK.

Finally, is you advisor a practising solicitor (and thus insured to advise you – check with the SRA) and if so is your solicitor a full member of the Insolvency Lawyers Association (‘ILA’) (ask them). Membership of the ILA is a public mark from insolvency peers that your representative has the requisite knowledge, skill and experience to advise you. I am both. Accept no substitutes.

Until the next time…

THE DIRECTORS FRIEND

Posted in Blog / News, Business, Companies and Corporate, Corporate Finance, Corporate Recovery, Insolvency | Leave a comment

Complex challenges for employers in the year ahead

Constant changes and increasing complexity have helped make employment law a frontline challenge for business and this year looks set to continue the trend. 

The first weeks of January saw Maggie Dewhurst, a bike courier with City Sprint, winning her case to be treated as a worker, rather than a self-employed contractor. The high-profile case follows hard on the heels of the similar ruling given late last year in the action brought by Uber drivers, which the company has said it will appeal.

A worker may be entitled to certain rights such as the national living wage, paid holiday and sick leave, where a contractor would not.  An employee may also be a ‘worker’, but with extra employment rights and responsibilities.

“The decision in the case of Maggie Dewhurst vs City Sprint will apply only to her personally, but it puts such working practices under the spotlight, especially in the so-called ‘gig economy’, where people are employed by companies on a job-by-job basis,” explained Brendan O’Brien head of Business Services and Managing Director at Breeze & Wyles Solicitors Limited.  “But the issues involved can equally apply in many other sectors where companies may be trying to optimise their staffing, if they do not realise the distinctions between an employee, a worker and a self-employed contractor. A number of cases are now working their way through the courts and I expect we’ll see this topic in the headlines throughout 2017.”

Alongside, the Government is moving to crack down on unscrupulous employers to stamp out exploitation in the workplace, after several companies hit the headlines for poor practices in recent months, including reports that workers at Sports Direct were receiving less than the national minimum wage and being subjected to humiliating working practices.  The new Labour Market Enforcement body will take the lead in this, headed by Prof Sir David Metcalf, a founder of the Low Pay Commission.

Together with other employment legislation already announced for introduction this year, bringing further significant changes and new requirements, businesses need to make sure they are up to date with their practices and terms of employment.  The up and coming legislation includes:

Gender pay gap reporting:   The Equality Act 2010 (Gender Pay Gap Information) Regulations are set to come into force on 6 April 2017 meaning all private sector organisations with at least 250 employees must publish details of their gender pay gap, for both basic pay and any bonus payments.  The first reporting will be due no later than 4 April 2018, and annually after that.  This could be a raw topic for supermarket employer Asda who recently lost an equal pay claim brought by women workers, who claimed their work was equal to male warehouse workers.  In the preliminary judgement, the women won their case but Asda are expected to appeal.

Apprentice levy:  Also due on 6 April is the annual apprenticeship levy, under the Finance Act 2016 (part 6).  In a Robin Hood style approach, the levy must be paid by all private and public sector employers in the UK with a pay bill of £3m and above. It will be charged at the rate of 0.5% on their total pay bill, with an annual allowance of £15,000.00 to offset against the levy payment. The income will be used to fund a new system of post-16 apprenticeships, which will be available to those employers falling below the £3m threshold.

Salary sacrifice schemes:  As announced in the Autumn Statement, the Finance Bill 2017 will set out changes to the tax status of salary sacrifice benefits with effect from April 2017.  The changes will see an end to the tax saving benefits of most salary sacrifice schemes, which will become subject to the same taxation as cash income. Any arrangements in place before 6 April 2017 will be protected for one year, or four years in the case of cars, accommodation or school fees.  The extension will apply until the arrangement ends, is renewed or otherwise modified.  Remaining exempt from tax will be pensions and related advice, cycle-to-work and ultra-low emission cars.

Tax-free childcare:  Also retaining its taxation benefits will be existing employer-supported childcare voucher schemes.  These can remain open to new entrants until April 2018 with childcare vouchers and all associated tax savings available for the life of the scheme.  However, the Government is expected to launch a new, alternative tax-free childcare scheme, which will allow working families satisfying a minimum/maximum income requirement to claim 20% of childcare costs for children under 12, or under 17 where children have a disability, capped at £2,000 per year.  The two schemes can run in tandem, but once a new scheme has been established no new employees will be allowed to join an old-style childcare voucher scheme and still receive the tax benefits.

Holiday pay:  An appeal by British Gas to the Supreme Court will challenge last year’s ruling by the Court of Appeal that holiday pay should be ‘normal pay’ and include contractual results-based commission. The appeal is expected to be heard in March 2017 but in the meantime the ruling stands and employers need to look at irregular payments made to employees and establish which are to be included within ‘normal’ pay and so be included in any calculation for holiday pay.

He added: “The complexity around holiday pay calculations means employers are likely to need advice to get it right.  It’s just one example of how employment law continues to pose challenges for business, and the year ahead is certainly no exception.  It’s important to get ahead of the deadlines and make sure you’re addressing the changes across all aspects of the business.

“And while European law is behind some of the upcoming legislation or court rulings, it cannot be ignored on the basis that we are starting the process of withdrawing from the European Union, whatever style of Brexit is adopted by the Government.  For now, everything stands.”

ENDS

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues

https://www.gov.uk/employment-status

Regulation 2 (1) of the Working Time Regulations 1998

Dewhurst v City Sprint

Mr Y Aslam, Mr J Farrar and Others -V- Uber

Lock v British Gas

Brierley v Asda Stores Limited

The Equality Act 2010 (Gender Pay Gap Information) Regulations

Posted in Blog / News, Business, Employment | Tagged , , , , , , , , , , , , , | Leave a comment

Getting rocky relationships through tinsel-time

The family-focus of Christmas is often followed in January with news of unhappy couples who decide to call it quits, leading to so-called Divorce Day, as family lawyers receive a surge of enquiries when they re-open after the break.

And as the holiday season goes into full swing, there are calls for greater support for couples, based on better understanding of outcomes.
According to the latest figures from the Office for National Statistics (ONS), the overall rates of divorce are continuing to fall.  There were 111,169 divorces in 2014, a decrease of 3.1% compared with 2013 and 27% lower than 2003.
Compared with data from 2004, divorce rates were lower for all age groups, except women aged 55 and over. As younger people look to be having fewer problems in the first decade of marriage, this has been attributed by ONS to higher numbers of couples cohabitating before marriage, with the suggestion that only the stronger relationships make it through to the wedding day.
But those working at the front-line say the apparent improvement should not obscure the increasing difficulty faced by couples looking to separate.  For although the process of securing a divorce is relatively straightforward, the associated negotiating over finances and children is proving an increasing challenge.
Faced by the cuts to legal aid and higher Court fees – the cost of applying for a divorce increased from £410 to £550 in March 2016 – through to the difficulty in affording to set up two homes, many couples are turning to increasingly desperate measures.
For some, it involves continuing to live together, even when officially separated, or even post-divorce, including so-called ‘bird nesting’ arrangements, where the children stay in the family home and the parents come and go.  Others turn to online help or seek an agreement without independent advice, only to discover later that they may have agreed financial or childcare outcomes that leave them at a significant disadvantage, when professional advice and representation could have reached a fairer outcome.
“Unfortunately the workload of the family lawyer is not reducing,” said family law expert Karen Johnson of Hertford-based solicitors Breeze and Wyles Solicitors Ltd.  “And dealing with problems arising from self-conducted negotiations, or where negotiations have been managed by an untrained intermediary, is becoming more common.
“DIY can seem a sensible option when you’re trying to keep the lid on costs and everyone is saying it’s simple. And whilst it’s true that the application process itself is relatively straightforward, that’s only one small part.  Nor is it fool-proof, and if you get it wrong it could lead to paperwork being sent back, which could mean additional court fees.”
She added: “It’s tough sorting things out between the two of you when emotions are running high, but talking things through is the best way and having someone help you with those conversations is a good idea.  They don’t have to be a professional, but you should have expert input at some stage in the negotiations, to make sure that what you have agreed is fair, that neither party is pushing the other into a corner, and that it is in line with what you could expect as a reasonable outcome if you had gone to court.”
Such encouragement for couples to talk reflects the findings of recent research in the United States.  This suggests that couples who share their problems with each other are more likely to overcome difficulties than those who share problems with their friends.  Reported in the Journal of Social and Personal Relationships, researchers found that sharing concerns with a friend increased the odds of a break-up by 33 per cent, but talking it out with a partner doubled the chances of them staying together.
She added: “Ending a marriage is one of the toughest things anyone will ever deal with, and what’s needed is a well-informed, collaborative approach.  The couple, and anyone supporting or advising them, need to be focused on achieving an outcome through positive negotiation that is more talk, less war.”

Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.

Reference:

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/divorce/bulletins/divorcesinenglandandwales/2014#statisticians-quote

 http://www.dailymail.co.uk/sciencetech/article-4010064/Relationship-troubles-Don-t-tell-mates-Confiding-female-friends-makes-likely-break-up.html#ixzz4SzsRxTa6

 

 

Posted in Blog / News, Divorce, Family and Divorce, For individuals | Leave a comment

The Latest Insolvency Service Enforcement Statistics are out!

This is the latest in the series for my blog ‘The Director’s Friend’.

In a press release dated yesterday (13 December 2016) the Insolvency Service (the ‘IS’) set out their latest enforcement outcome statistics.

These show that for the year 2015 / 2016 that 1,210 director disqualification orders and undertakings were obtained with a running total of 807 for the year to date. The clear majority of the disqualifications were pursuant to section 6 of the Company Directors Disqualification Act 1986 (‘CDDA’).

The average length of a disqualification is on the up to 5.9 years.

In passing the number of Bankruptcy and Debt Relief Restriction Orders and Undertakings is down sharply from the period 2009 / 2010, but is still in excess of 300 a year.

The average length of a Restriction, however, is at an all time high at 5.3 years.

COMMENT:-

The director disqualification statistics show that directors of companies that have been placed into liquidation and administration are at risk of being investigated and disqualified with the period of time that the director is disqualified for on the increase.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification by the IS please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out. Your work will be carried out by me or others under my close supervision. Finally, I am happy to come to you to take instructions.

Until the next time…

THE DIRECTORS FRIEND

Posted in Blog / News, Business, Companies and Corporate, Debt Recovery, Insolvency | Leave a comment

More Bad News for Directors and their Personal Liability

This is the next in the series of blogs for the Directors’ Friend.

A director of a company that has been placed in to formal insolvency may receive an enquiry letter perhaps enclosing a Directors Questionnaire from the Insolvency Service.  They may also receive a letter being a notice under Section 16 of The Company Directors Disqualification Act 1986 (“CDDA”) notifying of the intention of the Secretary for State for Business, Energy & Industrial Strategy (that is the Insolvency Service) (“SOS”) to commence director disqualification proceedings against you.

WHAT SHOULD YOU DO?

Do not ignore the letter.  As the consequences for you could be limiting and expensive!

You could consider offering a disqualification Undertaking to be disqualified in order to avoid going to Court or possibly fight the case in Court.  It is inadvisable to do anything without the benefit of specialist legal advice in any event.

Now that is even more the case – Why?

DIRECTOR DISQUALIFICATION AND DISQUALIFICATION ORDERS AND UNDERTAKINGS

In brief, there has been a recent change in the law that is completely new by way of Section 110 of the Small Business, Enterprise and Employment Act 2015 (“SBEEA”) which now allows the Court to make a compensation order against a disqualified director where it appears to the SOS that certain conditions in new Section 15(A)(3) of the CDDA are met in that:

“(a)      the person is subject to a disqualification order or disqualification undertaking under [the SBEEA] and

 (b)        conduct for which the person is subject to the order or undertaking has caused loss to one or more creditors of an insolvent company of which the person has at any time been a director.”

FOR THE BENEFIT OF:

Under new Section 15(B) the amounts payable under compensation orders and undertakings are to be for an amount specified (in the order) to be paid to the SOS for the benefit of:

  1. A creditor or creditors specified in the order;
  2. A class or classes of creditors so specified.

This is as a contribution to the assets of the company:

A compensation undertaking (pursuant to Section 15(b)(2)) is for the same but with an out of court settlement with the SOS.

COMMENTS:

  • This is a new law and an entirely new area of law whereby the SOS in the context of director disqualification is seeking to claim compensation for the benefit of creditors or classes of creditors from the disqualified director.
  • This is an additional statutory power in addition to the powers available to liquidators of companies in liquidation, for example under the Insolvency Act 1986 to include for:
  1. Misfeasance (Section 212);
  2. Transactions at an Undervalue (Section 238);
  3. Preferences (Section 239);
  4. Wrongful trading (Section 214);
  5. Fraudulent trading (Section 213); and
  6. Transactions defrauding creditors (Section 423)

which are other statutory claims by which the liquidator as office holder can seek to recover assets for the benefit of the insolvent estate.

  • It strikes me that there are all sorts of issues to be raised in terms of disputing the conduct and/or resisting the application on the basis of, for example, remoteness of loss and causation of loss. These are applicable in, for example, Misfeasance proceedings.  It would appear to me that they would surely have equal relevance in these compensation proceedings.
  • It is likely in my view that the driving force is to make recoveries for the Exchequer in circumstances where a large number, if not the majority of the director disqualification proceedings brought are, in my experience, for trading to the detriment of the Crown and/or a failure to pay the Crown debt.  The compensation regime would appear to be a vehicle to primarily compensate HM Revenue and Customs, but the SOS’s approach remains to be seen. For example, how far is the SOS likely to interrogate a proof of debt lodged?

OTHER CLAIMS AND EXPOSURE BY THE DIRECTORS:

It would be of concern to the well advised director that any successful recovery by the SOS in compensation proceedings may lead to other claims (as above) being brought by the liquidator of the company.

The office holder is obliged to seek and retain any recoveries on behalf of all of the creditors of the insolvent estate of the company (subject to costs) and it would appear at present that the SOS is only obliged to make recoveries for specific identified creditors who have suffered losses.  It would therefore appear to be a tension between the office holder and the SOS bringing these financial recovery proceedings.

PARALLEL CLAIMS BEING FACED BY THE DIRECTOR:

It would seem very unfair and unlikely that any court would allow both the SOS and an office holder such as a liquidator to bring proceedings against a director based upon the same facts and circumstances.  In other words at risk of having to pay twice for the same offending (mis)conduct.

SUMMARY:

It is therefore the case that the well advised director seeks and obtains advice at an early a stage as possible when the SOS first make enquiries.

With the new compensation orders regime running in parallel with director disqualification proceedings the financial risk and exposure of the directors has now increased.

It remains to be seen how the tension between compensation claims brought by the SOS and the office holder will be resolved with the director in the middle.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification or a liquidator has sent you a letter before claim please talk to me today.  That is in order to protect your position without delay.  The earlier that you speak with me the more that I can help.  Why not call me today on 01992 558411 and speak to me without obligation, pressure or cost.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out.  Your work will be carried out by me or others under my close supervision.  Finally, I am happy to come to you to take instructions.

In February / March 2017 I am intending to give a seminar on this topic. Details to follow.

Until the next time…

THE DIRECTORS FRIEND

Posted in Blog / News, Business, Companies and Corporate, Debt Recovery, Insolvency | 1 Comment

THE LATEST INSOLVENCY SERVICE ENFORCEMENT STATISTICS ARE OUT

This is the latest in the series for my blog ‘The Director’s Friend’.

In a press release dated yesterday (13 December 2016) the Insolvency Service (the ‘IS’) set out their latest enforcement outcome statistics.

These show that for the year 2015 / 2016 that 1,210 director disqualification orders and undertakings were obtained with a running total of 807 for the year to date. The clear majority of the disqualifications were pursuant to section 6 of the Company Directors Disqualification Act 1986 (‘CDDA’).

The average length of a disqualification is on the up to 5.9 years.

In passing the number of Bankruptcy and Debt Relief Restriction Orders and Undertakings is down sharply from the period 2009 / 2010, but is still in excess of 300 a year.

The average length of a Restriction, however, is at an all time high at 5.3 years.

COMMENT:-

 The director disqualification statistics show that directors of companies that have been placed into liquidation and administration are at risk of being investigated and disqualified with the period of time that the director is disqualified for on the increase.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification by the IS please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out. Your work will be carried out by me or others under my close supervision. Finally, I am happy to come to you to take instructions.

Until the next time…

THE DIRECTORS FRIEND

Posted in Blog / News, Business, Companies and Corporate, Insolvency | Leave a comment

New Stalking Laws – look who’s behind you

untitledThe Home Secretary, Amber Rudd has announced that the Government is set to introduce new Stalking Protection Orders.

The orders in England and Wales aim to offer quick protection to people who find themselves targeted by strangers similar to that which is afforded to domestic abuse victims.

In 2012 the government introduced 2 new offences of stalking via the Protection of Freedoms Act 2012. Whilst there is no strict legal definition of ‘Stalking’, the legislation sets out examples of behaviours which can be associated with stalking, eg, following a person, watching or spying on them or forcing contact with them through social media etc. In isolation the conduct can be innocent but when conducted repeatedly the impact upon the victim can cause significant alarm and distress and curtail the victim’s freedom as they feel vulnerable and left constantly looking over their shoulder.

In December 2015 the government launched a consultation paper to consider the protection that was currently offered to victims of stalking and whether and what change could be put in place to offer better protection.

On the 7th December 2012, the Government published its response to the consultation. The consultation identified concerns that current measures lacked consistency, were slow, costly and placed too much responsibility on the victim to protect themselves.

These proposed orders would allow the police to apply to the court for orders even before a suspect is convicted or arrested. This early intervention aims to offer swift protection for victims, prevent behaviours from escalating and removes the onus from the victim to protect themselves

The exact nature of the orders will vary depending upon the circumstances but would typically prevent the suspect from contacting the victim or going near them but could also impose positive obligations such as interventions to identify and treat any underlying mental health difficulty. Breach of these orders would carry a punishment of up to five years in jail.

The Government has indicated that it would seek to introduce new laws as soon as parliamentary time allows.

At Breeze and Wyles Solicitors Ltd our specialist family solicitors understand the impact of domestic abuse, harassment and stalking. We are able to offer practical advice in plain English in relation to the options available to you with appointments available at our offices in Hertford, Bishops Stortford and Enfield or nationally via telephone or Skype.

For more information on how our family solicitors can help you call us on 01992 558411 or alternatively complete our online enquiry form.

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The one time you should look for the price tag on that gift

The Bribery Act ushered in a stricter anti-corruption regime when it came into force in 2011 and although Christmas gifts and hospitality are not banned, it’s important that companies don’t splash out and end up in deep water with over-generous Christmas gifts

 If you’re worried there are too many bottles of wine bearing “Happy Christmas” messages from your suppliers, it’s worth checking out the facts and making sure staff know the right and wrong way to go about corporate gifting.

The Bribery Act came into force in 2011, simplifying and consolidating existing law on corruption and creating a new crime of failing to prevent bribery. When it became law, many commentators thought it might end all corporate hospitality. That wasn’t the case, with the Ministry of Justice’s later guidance saying: “hospitality is not prohibited by the Act”, but any gifts must be reasonable and proportionate. So companies who splash out and are over-generous in their gifting could find themselves breaking the rules and getting both themselves and the recipient into deep water.

In simple terms, bribery is defined as giving or offering a person a financial or other advantage with the intention of inducing them to act improperly. It is also a crime to ask for or to receive an inducement in return for acting improperly.

Said Donna Bromyard, corporate expert with Hertford solicitors Breeze and Wyles Solicitors Ltd: “When it comes to gifts or any form of hospitality, the simplest thing is to have a clear threshold that’s appropriate to the sector you’re operating in, whether giving or receiving.  Then, if anything offered has a value beyond that, employees must obtain permission.  It’s also sensible to make sure everything, however small, is logged in a central register.”

As well as looking at the price ticket on gifts or hospitality, companies also need to demonstrate that they are doing it with the right intentions. A gift given at Christmas-time is less likely to be problematic than something offered during contract negotiations or when an extra invoice has been submitted.  Similarly, hospitality that doesn’t involve any opportunity for business development on the part of the giver is likely to raise questions.

Added Donna Bromyard: “Entertaining your customers at a Christmas party, or providing a modest bottle of wine, is unlikely to cause problems.  But if you offer a pair of theatre tickets and a dinner reservation for two at a posh restaurant to a key contact and their spouse, that is much less likely to pass the “reasonable and proportionate” test. Where there’s a clear opportunity to promote the company supplying the hospitality, it’s more likely to be seen as reasonable business development.

“Preventing bribery is important for any business, whatever their size, and every company must demonstrate they are taking it seriously. That includes undertaking risk assessments, making sure staff know the procedure, and setting everything out in writing.”

Since the introduction of the Bribery Act, the Serious Fraud Office has shown a tough attitude to enforcement and seeking out corruption. In one recent high profile case, construction and professional services company Sweett Group PLC was ordered to pay £2.25 million as a result of a conviction arising from a failure to prevent bribery taking place. A subsidiary company in the United Arab Emirates had made corrupt payments to an individual with the intention of influencing the awarding of a building contract in Abu Dhabi.

www.justice.gov.uk/guidance/bribery.htm

Our Business Services Department at Breeze and Wyles Solicitors Ltd is able to offer a full range of advice and services to business. For information and advice in relation to the above or any other issue affecting you or your business contact us on 01992 558411.

 

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This is not legal advice; it is intended to provide information of general interest about current legal issues.

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