The recent case of Noble Vintners resulted in a very interesting new decision relating to director disqualification. The director in question had been subjected to a disqualification order, having been found to have misappropriated in excess of £500,000.00 from the company. In the first ruling of its kind under the Company Directors Disqualification Act 1986, a compensation order was made against the director for the loss he had caused to the company's creditors.
This decision comes as a warning to directors not abiding by their director's duties. There are a number of people who agree, as a professional, to being a company director, without fully understanding their obligations and the potential pitfalls of taking on that level of responsibility. If you are considering becoming a director, it is imperative that you ensure to take professional advice on the duties expected of you in that role, so that you can make an informed decision and avoid any future complications, particularly in the highly litigious society we now have.
High Court decision to make a compensation order under section 15A of the Company Directors Disqualification Act 1986 (CDDA 1986) against the defendant director of a company. He had earlier been made subject to a disqualification order for misappropriating £559,484 from the company, which was in creditors’ voluntary liquidation, and thereby causing a loss to its creditors in that amount. The compensation order, in the sum of £559,484, was the first to be made against a director under CDDA 1986 and the court gave guidance on the factors to be taken into account.