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Government rhetoric on director disqualification welcomed, but it doesn’t match record – R3

Responding to the Government’s announcement on director disqualification, Giles Frampton, vice-president of insolvency trade body R3 says:

“We’re very pleased to see action from the government in such an important area. R3 has been calling for improvements to the disqualification process for some years now, and it’s good to see government has been listening.”

“It is encouraging that the government has made director disqualification such a priority.”

“However, while the government’s proposals may help improve performance on disqualification, there is still more work to do before reality matches rhetoric. More investment in the Insolvency Service is needed, as is reform of how rogue directors are reported.”

“Director disqualification is currently an area of real concern for creditors and the insolvency profession.”

“While the number of reports of rogue directors has increased by over half in the last ten years, the number of directors actually disqualified has fallen by a quarter at the same time.”

“Unless the government is able to up its game, creditors – including small businesses and the taxman – will be exposed to people who are responsible for business failure after business failure.”

“Budget cuts at the Insolvency Service are one major factor here: expertise and experience have fallen victim to staff cuts.”

“Much more investment is needed if the government is going to achieve its aims.”

“Unfortunately, the government’s approach to rogue directors is far from joined up: while BIS is trying to bolster powers to deal with directors, the Ministry of Justice is ploughing ahead with changes to insolvency litigation funding that will make it harder for insolvency practitioners to pursue directors and third parties that have taken money out of businesses that belongs to creditors.”

“We do have some specific concerns with the government’s proposals: we would like safeguards put in place alongside the proposals on assigning claims to third parties and compensation orders, for example. We look forward to working with the Insolvency Service on this.” 

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.