As long as a person deals with matters early, costs can be limited. The golden rule is that the earlier a person deals with a threatened claim, the cheaper it is. Ignoring threatened claims is ill advised as they are unlikely to be dropped and the person could, if formal proceedings are issued, be faced with paying the Secretary of State’s legal costs.
However, as a director of a company, an individual does have statutory duties to cooperate with the Secretary of State and the Official Receiver in respect of these enquiries and accordingly they cannot be ignored. The most important approach to take is to obtain proper advice before sending off any responses. The longer a person leaves these claims, the more expensive they can become and the worse that person’s/your prospects of getting rid of them.
Once disqualification proceedings have been commenced against a director, a decision which normally arises following a detailed review of the strength of the case by government departments, the only choices he/she will have will be to either provide a disqualification undertaking or contest the disqualification claim.
The former route of an undertaking is undoubtedly cheaper than defending a case. However, by defending a case, the person maximises his/her chances of not being disqualified at all.