§ Mr. HaywardTo ask the Secretary of State for the Home Department if he will review the rules regarding the level of legal costs which may be granted out of company funds to directors of companies in administration or receivership.
§ Mr. RedwoodI have been asked to reply.
There are no such rules in the insolvency legislation. The receiver or administrator has discretion over which legal costs he should incur in the interests of carrying out his duties. Company directors in failed companies usually have to meet their own costs if legal action is taken against them.
§ Mr. HaywardTo ask the Secretary of State for the Home Department if he will review the advice issued to liquidators and administrators in relation to finance allowed to directors of companies in administration/ liquidation or receivership.
§ Mr. RedwoodI have been asked to reply.
This is a matter for the liquidator's or administrator's professional judgment and is not the subject of advice issued by my Department.
In formal insolvency proceedings, a creditors committee may be established and may require information on those and other matters.