§ Mr. Austin MitchellTo ask the President of the Board of Trade (1) what percentage of initial unfit conduct reports received during the past six years from insolvency practitioners, pursuant to the Company Directors Disqualification Act 1986 were received within the time limits specified in the Act;
(2) if he will make a statement of what measures he has taken to ensure that insolvency practitioners fulfil their statutory requirement in relation to the Company Directors Disqualification Act 1986.
§ Mr. Jonathan EvansThe Company Directors Disqualification Act 1986 requires an insolvency practitioner to report forthwith when it appears to him that the conduct of a director makes him unfit to be concerned in the management of a limited company. Where he has not so reported, he is required to submit a return no later than six months after his appointment as officeholder.
Statistics are not available for the past six years, but the National Audit Office examined a representative sample of 102 initial reports submitted between April and June 1992, which showed that 22 per cent. were received within six months.
In March 1993, the Insolvency Service issued guidelines to insolvency practitioners to assist them in complying with their obligations to report unfit conduct in a timely way but without sacrifice to quality. These guidelines have been re-enforced by newsletters to insolvency practitioners.
In addition, insolvency practitioners are subject to monitoring visits either by their authorising bodies or by the joint insolvency monitoring unit, for the purpose of ensuring compliance with insolvency legislation including the requirements of the Company Directors Disqualification Act.
In 1995, separate visits will be undertaken by the Insolvency Service to practitioners who have demonstrated poor compliance with the Act. If there is no subsequent improvement in performance, the practitioner will face possible licensing action or in extreme cases prosecution.