Published: 18/09/2025 By Andrew Bailey
When a company goes through an insolvency process such as a Liquidation or Administration we as insolvency practitioners are required to submit a director conduct report to a Government agency. The cases are reviewed and it is for that agency to then decide whether to pursue disqualification proceedings against the director(s).The area of focus for disqualifications we often hear about is Bounce Back Loan abuse which arose from the pandemic. This comes down to whether when they self-certified the application, they applied for the correct amount and/or did they use the funds correctly. There has been abuse but I don't think it is unreasonable to say that pursuing these disqualifications is fairly straightforward compared to other types of misconduct because when it comes to seeking a director disqualification it is often pretty clear whether the application was correct or they spent the funds somewhere else other than for the benefit of the company.
However, the messages I receive about disqualifications are that there is only a finite resource to support the cases being pursued and some cases will not be pursued because they are not as bad compared to others or there is too much litigation risk.
I get this to some extent. Whilst bounce back loan abuse needs to be addressed, it is often low-hanging fruit. But what about the more serious cases of fraud and misconduct? The ones that involve fraud, asset stripping, or deliberate creditor deception? These cases are harder to pursue, carry litigation risk, and demand more investigative effort, but they’re also where the most egregious harm is done.
Disqualification should be about protecting the public and upholding standards of corporate governance. When enforcement focuses on the easiest wins, it risks sending the wrong message: that serious misconduct might go unpunished if it’s complicated.
My point is that if the policy around disqualifications is driven by numbers and the agency must be seen to be achieving a certain number each year then is this the best way forward?
Do we risk ignoring the worst offenders because it is a bit more difficult to pursue?