UK Proposes Corporate Enforcement Reforms to Speed Disqualifications

• •Proposed five-year disqualification for directors after public-interest winding-up orders.
• •Transfer of disqualification decisions from courts to the Secretary of State to expedite processes.
• •Concerns raised about maintaining procedural fairness amid faster enforcement.

The UK Insolvency Service has launched a consultation on Corporate Civil Enforcement Reforms aimed at addressing issues related to corporate misconduct. Key proposals include a five-year disqualification for directors following public-interest winding-up orders and transferring disqualification decisions from courts to the Secretary of State. The reforms seek to improve the speed of disqualifications, which currently average 22 months for voluntary undertakings versus 37 months for court orders. However, concerns remain about the balance between speed and procedural fairness. The consultation also proposes changes to evidential burdens for recovery of assets and includes shadow directors as targets for breach of duty claims. The reforms are part of an effort to modernize a legal framework that has not been updated in nearly 40 years.