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The Insolvency Service case summary
Mr A was unhappy about being disqualified as a director, following the liquidation of a company in which he had been involved. In this case, rather than attending a court hearing, Mr A had agreed to sign an undertaking not to act as a director. The Insolvency Service told us that, if Mr A had a problem with the length of the undertaking, he could apply to court for it to be varied. Alternatively, if he was unhappy with the actual disqualification, he could apply to court to contest it. As this office is not an alternative to the courts, we were unable to consider these particular matters.
Mr A was not happy that The Insolvency Service imposed deadlines for replies to their letters. He felt he should have been told about the possibility of a meeting with them at an earlier stage in the disqualification procedure. He said it was wrong that The Insolvency Service had not contacted him before they decided on disqualification action against him. He also felt there was not a thorough investigation prior to the decision to disqualify him.
We did not uphold this complaint.
We felt that The Insolvency Service's imposition of deadlines was reasonable. We were satisfied that they were merely trying to ensure the speedy progress of the case. The court will not normally allow any disqualification action more than 24 months after the liquidation so The Insolvency Service must progress matters within a set timescale.
We did not criticise The Insolvency Service for not publishing the fact that a meeting was available. They said that the opportunity for the director to contact them and discuss the situation was always available. The Insolvency Service assured us that meetings have been held in the past and that they are not averse to holding them.
It was unfortunate that it took 5 months and the intervention of an MP finally to request a meeting. We were, however, pleased to note that, to avoid any confusion in the future, The Insolvency Service will, from now on, point out to those in Mr A's position that a meeting is available early in proceedings.
The Insolvency Service's policy dictates that directors need not be contacted in every liquidation before a decision is taken to disqualify. We told Mr A that we could not comment on their policy and could only look at whether they had followed their standard practice. In this case, we felt they had followed that practice. We noted that The Insolvency Service plan to contact directors in the future before they are told whether they are likely to be disqualified.
