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Company Director Fraud Claims
Officeholders can bring claims against directors, or former directors, for various acts of fraud against the company of which they were a director. If found guilty of fraudulent trading, they can be held personally liable for the losses caused to the company’s creditors.
Claims against directors for breach of duty are not subject to a limitation period if the breach is fraudulent. Accordingly, directors cannot rely on limitations as a defence.
Fraud claims are the most serious claims to be brought against company directors. You are best advised to seek legal advice before submitting evidence or a defence in a writing. We have experience in high-value, complex fraud disputes in an insolvency context.
How JMW Can Help
The team at JMW regularly advise directors on their duties and options when they have been accused of committing fraud. We regularly defend directors in relation to proceedings brought by insolvency practitioners or government authorities.
Our team includes an experienced licensed insolvency practitioner and we regularly work with forensic accountants and other professional firms, both large and boutique, so we can tailor the level of service and costs to the client’s needs.
We are experts in confiscation and restraint proceedings and have a track record of challenging court orders successfully.
Types of Company Director Fraud Claims
The Companies Act 2006 and Insolvency Act 1986 contain a rather surprising number of criminal offences, including but not limited to, the following:
- Fraudulent trading
- Fraud in anticipation of winding up
- Transactions in fraud of creditors
- False representations to creditors
- Fraud in obtaining a voluntary arrangement
Directors guilty of these offences could face a fine and up to 10 years’ imprisonment, as well as disqualification proceedings.
Confiscation proceedings will also ordinarily follow conviction. These are purposefully draconian proceedings designed to strip a convicted offender of their assets.
With the Police and Crown Prosecution Service (CPS) beset by budget cuts, private prosecutions are becoming increasingly popular, particularly in respect of matters concerning fraud. Consequently, directors may find themselves defending claims on many fronts, whether it be claims brought by private individuals, former companies, the Insolvency Service,officeholders, the Serious Fraud Office, HMRC, the police and/or the CPS.