Tax and Insolvency Litigation Solicitor

Negotiating Settlement

The dispute can be settled either before or after Court Proceedings have been issued. If settlement means that the former director accepts a period of disqualification by way of an Undertaking, and Court Proceedings have already been issued, the former director will ordinarily be liable for some of the Insolvency Service legal fees.

If settlement is known to be likely before Court Proceedings are issued the former director should consider whether early settlement is a better outcome.

The main issues to be considered during an Settlement negotiation are the period of disqualification that the parties will accept and the basis of the agreed unfit conduct.

The appropriate period of disqualification ought to be considered in light of judicial principles as enumerated in previous court decisions.

The Undertaking will include an admission of the unfit conduct and it is an important document to get right. The admissions that are made in this publicly available document can potentially be relied upon by Liquidators in financial claims against the former director such as misfeasance claims.

In summary the following should be taken into account when negotiating settlement –

  • Which parts of the claims are defensible?
  • Can the claims be severed?
  • What are the costs consequences for making admissions?
  • What time period will the parties agree to and is that consistent with case law?
  • What conduct can the former director admit to?
  • Are there likely to be financial claims such as misfeasance claims arising from admissions?
  • Does the basis of settlement rule out a subsequent leave application?

Contact Us

To further discuss any area of Director Disqualification with an experienced lawyer please contact us or call us on 07460 005 769.

Contact Us

Please complete the form below