Insolvency Service targets phoenix directors - what the new crackdown means for fraud victims

Ben Hay, Legal Director in our Fraud team has been quoted in the media on the news that the Insolvency Service is making "abusive phoenixing" a priority under a new five-year strategy, backed by a 50-strong taskforce and AI-driven data analysis to target directors who repeatedly dissolve companies to dodge debts before relaunching under new entities.

Ben commented: "The new five-year strategy is certainly a welcome development. As fraud lawyers, we all too often see unscrupulous directors using corporate structures to their advantage in an attempt to muddy the waters and to try and make recovery of assets more difficult. I am therefore keen to see, in particular, how effective the larger taskforce is in assisting victims with spotting the warning signs for phoenix companies early on and recovering assets that have been obtained fraudulently. We also of course await recommendations following the Corporate Civil Enforcement Reforms Consultation which closed over the summer and which has consulted on further measures to tackle poor corporate governance such as significant structural changes to the civil enforcement regime and improvements to information gathering powers. It will be interesting to see how the recommendations from that consultation fit with the new five-year strategy and the drive towards faster and stronger action against misconduct."

Read Ben’s comments in the media:

• ICLG (International Comparative Legal Guide)

• Solicitors Journal