A new pilot scheme to recover money personally from fraudulent and negligent directors of failed companies has been launched by the Official Receiver. The scheme will be run for
a trial period in exclusive co-operation with the Forensic Insolvency Recovery Service (Firs), a multi-disciplinary team of insolvency practitioners, solicitors, counsel and enquiry agents.
Firs , which will be acting on a no-win, no- fee basis, will select individuals to pursue from cases where the Official Receiver believes legal actions may be possible against directors or other individuals or entities.
Many of these will be individuals who have been disqualified as directors under the Company Directors Disqualification Act. Cases will be taken on by Firs via the appointment of licensed insolvency practitioners within Kingston Smith & Partners as liquidators. It will then be the responsibility of the Firs team to get results.
Initially the scheme will encompass Insolvency Service Offices in the London, Southeast and Anglia regions. Once a number of cases have been concluded the scheme will be evaluated and, if successful, could be extended nationwide and other licensed insolvency practitioners can be involved.
Official Receiver
The Official Receiver will usually be the liquidator in situations where there are apparently few or minimal assets left in a failed company. These types of cases tend to be rife with misconduct issues, since many will have had their assets completely stripped by the directors.
Some rogue directors routinely put companies into liquidation, ensuring that there are barely sufficient assets left to pay the costs of the liquidation and so frustrate recovery action. Firs’ use of conditional fee agreements and adverse costs insurance will ensure that legal remedies are pursued energetically.
