The claimant sought a disqualification after the defendants had been directors of a company mis-selling Structured Capital at Risk products. The FSA had reported that they had been negligent.
Held: ‘I do not have to decide whether or not the defendants were negligent. The question is whether their risk ratings were so flawed that they could not sensibly be arrived at. I do not think that DMA’s evaluation can be considered to have been so obviously incompetent that it would by itself render these defendants unfit to be concerned in the management of a company.’ However marketing considerations had overtaken the need to explain the underlying risks properly, and the products were mis-sold. This conclusion was not dependent on the report: ‘It flies in the face of common sense to say that these two individuals were, despite all this, fit to act as directors. While I stress that there was no dishonesty, it seems to me that the wrong balance was struck between marketing considerations and the interests of the consumer. That is where lack of commercial probity comes in and that is the conduct from which the public needs to be protected.’
Proudman J
[2009] EWHC 3263 (Ch)
Bailii
Company Directors Disqualification Act 1986 7
England and Wales
Citing:
Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
Cited – In Re Barings Plc, Secretary of State for Trade and Industry v Baker (No 5) ChD 25-Nov-1998
A person disqualified from acting as a company director might exceptionally be given permission to act as non-executive director in named companies where this appeared necessary and the cause of the original disqualification was unrelated.
As . .
Cited – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .
Cited – In re Grayan Building Services Ltd CA 1995
The degree to which an appellate court will be willing to substitute its own judgment for that of the tribunal will vary with the nature of the question. Hoffmann LJ said: ‘The concept of limited liability and the sophistication of our corporate law . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 09 November 2021; Ref: scu.383827