There are various ways misconduct can be reported in respect of companies and individuals. Establishing which authority has the power to conduct investigations of wrongdoing depends to a certain extent on the status of the companies and individuals.

The Insolvency Service is empowered by law as the proper authority to investigate transgressions such as serious corporate abuse and the conduct of directors of insolvent companies, disqualified directors, bankrupts and individual subject to bankruptcy or debt relief restrictions (“Transgressions”). We look in this blog at the channels available where a Transgression needs to be reported.

Anyone can report misconduct relating to a Transgression. However, in formal insolvency procedures, such action would ordinarily be taken by the licensed insolvency practitioner acting as office holder, who will invariably be best placed to report.

Reporting to the Insolvency Service

The Insolvency Service has withdrawn its previous guidelines on how to report wrongdoing (entitled ‘The Investigations Hotline”) and is directing complainants to consult new guidance issued on the government website gov.uk:- Reporting misconduct by companies, directors and bankrupts to the Insolvency Service. The previous reporting hotline is no longer operational and all complaints must be submitted either online or in writing to the Intelligence Hub at the Insolvency Service.

When a company or individual is in a formal compulsory insolvency process, it may be that the official receiver is the appropriate person to whom to submit a complaint. Details of the relevant official receiver’s office can be found here:- https://www.gov.uk/contact-official-receiver

Key Reporting Details

Complaints can now be submitted online using the following forms:

For companies: https://www.insolvencydirect.bis.gov.uk/ExternalOnlineForms/CompanyComplaint.aspx

For individuals/directors breaching a disqualification order: https://www.insolvencydirect.bis.gov.uk/ExternalOnlineForms/BreachQuestionnaire.aspx

Alternatively, complaints can be sent in writing to Intelligence Hub Investigations and Enforcement Services, Insolvency Service, 4th Floor, Cannon House, 18 Priory Queensway, Birmingham B4 6FD.

The new complaints gateways may be useful to insolvency practitioners when reporting matters not connected to their statutory duties or to enable creditors and/or other stakeholders to make their own complaints.

Directors’ Disqualification

The Insolvency Service, in its October Enforcement Outcome press release, reported on three directors who have each been disqualified from acting as directors for 6 years. Each of the directors gave undertakings rather than going to the expense of defending proceedings – however, the impact of the undertakings is almost identical to a disqualification order.

The information released by the Insolvency Service showed that a total of 76 director disqualification orders and undertakings were obtained as a result of activities by the Insolvency Service in the period covered by the report, showing that it remains active in prosecuting misconduct and wrongdoing.

Enforcement statistics are compiled and published monthly by the Insolvency Service and can be accessed here: https://www.gov.uk/government/statistics/insolvency-service-enforcement-outcomes-201718

Summary

There are various mechanisms for reporting misconduct associated with insolvency. Who the appropriate contact is and who should notify the claim will usually depend on the status of the company or individual and whether or not a licensed insolvency practitioner has been appointed to manage their affairs. Depending on the nature of the misconduct, it may be that legal advisors can be deployed to manage the process to maximise chances of any recovery and/or capitalise on obtaining the appropriate redress against the person who has committed the wrongdoing.

The Squire Patton Boggs Restructuring & Insolvency team is ideally placed to advise on the best course of action so that any insolvency related complaint and/or issue can be resolved swiftly and successfully.