Determining the period of director disqualification (Secretary of State for Business, Innovation and Skills v Rahman)

Determining the period of director disqualification (Secretary of State for Business, Innovation and Skills v Rahman)

Discussing the judgment in Secretary of State for Business, Innovation and Skills v Rahman, Omar Ensaff, a barrister at No 5 in Birmingham, points out that the issue of the period of disqualification is very fact-specific.

Original news

Secretary of State for Business, Innovation and Skills v Rahman [2017] EWHC 2468 (Ch), [2017] All ER (D) 83 (Oct)

The appellant Secretary of State (SoS) had alleged that the sole director of a company had failed to ensure the company had complied with the Immigration, Asylum and Nationality Act 2006, with the result that it had been fined £30,000 for employing two illegal workers, resulting in its liquidation. The Companies Court held that the deputy district judge (DDJ) had not erred in making a disqualification order for three years under section 6 of the Company Directors Disqualification Act 1986 (CDDA 1986)—he had been entitled to regard the case as falling in the lower bracket of seriousness. Further, the court, in considering preliminary issues, held, among other things, that appeal decisions, which gave guidance on which bracket of disqualification was appropriate, ought to be followed by an inferior court, and that there should be no difference between the principles applicable to determining the appropriate period for disqualification under CDDA 1986, s 2, and those applicable under CDDA 1986, s 6.

What was the background to the case?

This was an appeal by the SoS from a decision of a DDJ regarding the period of disqualification that the DDJ had ordered pursuant to CDDA 1986, s 6. In short, the DDJ had ordered that Mr Rahman should be disqualified for a period of three years, ie his period of disqualification was in the lower bracket as set out Re Sevenoaks Stationers (Retail) Ltd [1991] Ch 164, [1991] 3 All ER 578. The SoS thought that period of disqualification was too short and should have been eight years, ie in the middle bracket of disqualification. Accordingly, the

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.