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Following on from the recent consultation response on Bank Accounts for Bankrupts the Insolvency Service (IS) have published another interesting document, a review into the Farepak disqualification proceedings. The executive summary highlights the reports main findings:
There are a number of useful lessons to be learned from the Farepak case, although there was a recognition that all disqualification involves litigation and all litigation involves risk (including examination at trial). The improvements and affirmation of current practice have been annexed to the review. These cover the following areas:-
Improving the sense and understanding of ownership of the investigation and final affidavit in section 8 disqualification cases
Increasing the focus on any lessening of the public interest in progressing disqualification proceeding as the case develops and as time elapses
Strengthening assurance that witnesses are familiar with their evidence, its relevance and significance (including all exhibits) and are clear about the process and what is expected of them, especially where third parties may have prepared or assisted in preparation of affidavits, and where the witnesses may be unfamiliar with giving evidence.
Whilst it is not the Secretary of State’s role to speculate on what actions directors might have taken, explicit consideration should be given as to how, the defendant ought to have behaved. In the majority of cases the answer may be obvious but nevertheless the exercise may be of value. This may prompt rewording or a recasting of the affidavit and allegations.
· Continuing with the common practice, that Ministers and others are informed regularly of the progress of high profile cases
Ensuring that the contingent liabilities for cases are reviewed regularly by the audit committee and management board in the Service and regularly communicated through the monthly forecasting process to BIS."
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