Tuesday, 11 November 2014

Common Mistakes in Director Disqualification Claims - Trying to Deal with the Claim Yourself

Often with the best of intentions, directors will respond to enquiries from the Insolvency Service in the belief that their cooperation will help have the claim dropped against them.

What directors do not realise is that once enquiries are underway, the chances are that the Insolvency Service will carry on the claim unless cogent reasons are given to persuade them to drop the case. Often the initial enquiries seem innocuous and easy to answer. However, this is a standard approach and bluntly directors are often lulled in to a false sense of security and provide answers which are detrimental to their claim.

What is not often realised by directors is that any responses written by them without the benefit of legal advice can later be used against them as part of the evidence in a claim for their disqualification. It is very easy to say things and provide documents which you believe to be helpful but which in reality count against you. Taking early advice avoids these potential problems and can make the difference to the claim being dropped entirely without proceedings being issued.