Wednesday, 18 December 2019

Directors must count the cost of disqualification

Company directors who are disqualified could now find they face the extra penalty of paying compensation to creditors.

That’s the warning from Andrew Oranjuik, from Martin-Kaye Solicitors in Telford, Shrewsbury and Wolverhampton, who said changes in the law meant tougher judgements could be handed out.

“The law on the disqualification of company directors was changed in October 2016, and now we have seen the first ruling by the High Court under the new law which is a real wake-up call for bosses all over the UK.”

Mr Oranjuik said a compensation order could not be made unless the company where the person was a director was formally insolvent, usually through administration or liquidation.

“The director must either have been disqualified by the court or agreed to be disqualified, and this will only have taken place where the director has been involved in misconduct, committed an unlawful act, or has been found unfit to manage a company. And now, thanks to the change in the law, directors in this situation will be exposed to the extra risk of a compensation order if their conduct has caused a loss for the company’s creditors.”

Mr Oranjuik said the first case of its kind had involved a company director who had arranged for his company – prior to liquidation – to pay almost £560,000 to another company he owned, without any justification.

The court ruled that his actions had caused loss to the company’s creditors, and he had not taken any steps to try to repay the money. The liquidator did not have any funds to try to recoup any of the money from him either. So the court disqualified him for 15 years and ordered him to pay the entire amount back to the creditors.

“Before the change in the law, the director may not have faced action, but this case makes it clear that directors who act unlawfully at the expense of their creditors are now increasingly likely to face the risk of being held personally liable.

“Now that the courts can assess the loss to the creditors as part of disqualification cases, we expect to see a significant rise in the number of compensation orders being made, so it’s vital that directors are fully aware of their responsibilities and comply with the duties they are required to carry out.”

Tuesday, 17 December 2019

Law firm recognised for cyber security

A Shropshire law firm has been recognised for the security of its cyber systems for the second year running.

Martin-Kaye Solicitors has once again been accredited with Cyber Essentials by Falanx Cyber Defence – a Government-backed scheme supported by the National Cyber Security Centre.

The initiative encourages companies and organisations to adopt good practice in the way they use technology, and it protects them against a whole range of the most common cyber-attacks.

Martin-Kaye’s Office Manager, Samantha Azzopardi-Tudor, said: “We’ve worked very hard to retain our accreditation and it’s very pleasing to have our status confirmed for the second year in a row.

“Our commitment to this scheme and the recognition we have received is a clear indication to our clients and employees that we are constantly working to prevent cyber-attacks and protecting their personal data.

“As part of the criteria, we are required to show we are committed to using a secure internet connection in our offices, and to ensure that all our devices and software are also secure. It requires us to control who has access to our data and services, and for us to protect our systems from viruses and other malware, as well as making sure all our devices and software are regularly updated.”

Mrs Azzopardi-Tudor said the accreditation meant that Martin-Kaye Solicitors would again be listed in the recognised Government directory of organisations who have been awarded Cyber Essentials status.

“With the rising risk of cyber-attacks and the threat of increasingly sophisticated cyber-crime, many companies are now choosing to work only with advisors and professional service providers who have been accredited.

“So anyone specifically looking to appoint a law firm that meets the very highest standards of cyber security will find us on the list. This recognition assures our clients that we take cyber security seriously, and that we’re continually updating our systems to protect their data at all times.”

Cyber Essentials protects companies and organisations against the most common attacks – and it’s particularly important as vulnerability to simple attacks can mark a company out as a target for more in-depth unwanted attention from cyber criminals.

Pic: Martin-Kaye’s Office Manager Samantha Azzopardi-Tudor

Monday, 9 December 2019

Counting the cost of debt recovery

Businesses don’t need to be out of pocket when it comes to chasing up bad-payers according to a Shropshire solicitor.

Andrew Oranjuik, of Martin-Kaye Solicitors in Telford, Wolverhampton and Shrewsbury, said: “It’s annoying enough when customers don’t pay invoices, but the fact that it will cost your business even more money to pursue them is even worse.

“It’s true that in most types of legal claim, legal costs can’t be recovered if the claim is resolved before it gets to court.

“And you won’t be able to claim costs either if court action has started but the case is allocated to the small claims track which is usually if the claim is below £10,000 in value. But when it comes to business-to-business debts, there are special rules that apply and many companies may be unaware of their rights.”

Mr Oranjuik said under the Late Payment of Commercial Debts (Interest) Act 1998, a business is entitled to between £40 and £100 depending on the value of the debt itself.

“If that amount does not cover the actual costs that have been incurred, your business would be entitled to the reasonable costs you have paid out in order to recover the debt. And this will be the case whether or not court proceedings have been started, or if the case has gone to the small claims court.”

Mr Oranjuik said the rules could prove invaluable if a business had spent substantial amounts in chasing up a debt.

“Many businesses could be missing out on reclaiming costs because these rules are not widely used. But they mean that the reasonable costs you have run up collecting in bad debts can be added to the debt itself, so your business does not have to be out of pocket.

“If you’re unsure whether the rules are applicable for your business, it’s best to seek out expert advice before you spend any more time and money chasing up a debt that could have serious implications for your company’s finances.”