- Director disqualification and deterrence (Rwamba v Secretary of State for Business)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: On 20 October 2020, Mr Justice Miles overturned the judgment of the court below, which refused to provide Mr Rwamba permission to act as a director of two companies, and granted him permission to act. The case involved an application to the court under section 17(3) of the Company Directors Disqualification Act 1986 (CDDA 1986) for leave to be a director notwithstanding Mr Rwamba’s two previous disqualifications. The judgment highlights the balance between the questions of ‘need’ and ‘public protection’ and the element of deterrence. Miles J viewed deterrence as being ‘baked’ into the disqualification regime, however this did not mean that deterrence must be weighed more heavily in opposition of granting permission solely because the disqualification arose from a breach of conditions attached to an earlier grant of permission to act as a director. The judgment handed down by Miles J is ground-breaking in that it is the first reported case where permission has been granted to a director who is seeking permission under a previous leave order. The case will be of interest to practitioners who specialise in proceedings (and applications for leave to act) made under CDDA 1986. Written by Mandeep Kaur Virdee, managing partner, and Maria Madara, trainee solicitor, at KaurMaxwell Solicitors.
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