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Company Insolvency
Insolvency claims against directors
Our specialist team advises officeholders, creditors and stakeholders on pursuing or defending claims, providing clear, strategic advice to maximise recoveries and manage litigation risk.
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Pursuing and defending claims against directors
Claims against directors can arise during the corporate insolvency process. Our Insolvency and Corporate Restructuring team advises officeholders, creditors and stakeholders on pursuing and defending claims against directors arising from financial distress, insolvency and corporate failure. We provide clear, strategic advice designed to maximise recoveries and manage litigation risk.
What are claims against directors?
In an insolvency context, directors may face personal liability where their conduct has caused loss to the company or its creditors. Claims are typically brought by liquidators or administrators, but may also be pursued by creditors or assignees, depending on the nature of the claim.
These claims are designed to protect creditors and uphold proper standards of corporate governance.
"There is a depth of knowledge in the team, with a variety of specialist practitioners." Legal 500 2027
Common types of director claims
Claims against directors commonly include:
• wrongful trading;
• fraudulent trading;
• breach of directors’ duties;
• misfeasance and breach of trust;
• transactions at an undervalue;
• preferences; and
• claims arising from unlawful dividends.
Such conduct may also give rise to directors’ disqualification proceedings.
How claims are pursued
Claims are typically pursued by:
- liquidators or administrators acting on behalf of the insolvent estate;
- litigation funders or assignees following assignment of claims; or
- creditors, in specific circumstances.
Proceedings are civil in nature and determined on the balance of probabilities. Claims may be issued in the High Court or the County Court, depending on complexity and value.
Potential outcomes and remedies
- Successful claims against directors may result in personal financial liability of the director, including for
interest and costs and – ultimately, the enforcement over the directors personal assets or bankruptcy of the director.
Early legal advice is often critical in shaping litigation strategy and settlement outcomes.
How can we help?
We provide tailored advice on director liability and insolvency litigation, including:
- early merits assessment and recovery analysis;
- advising liquidators and administrators on potential claims;
- acting for creditors on strategic enforcement and recovery;
- defending directors facing insolvency-related claims;
- negotiating settlements and alternative dispute resolution; and
- managing parallel regulatory, insolvency and reputational issues.
Our approach is commercial, robust and objective-focused, with a clear emphasis on achieving pragmatic outcomes in complex insolvency disputes.
Get in touch today
Whether you are an officeholder assessing a potential claim, a creditor seeking recovery, or a director facing allegations arising from a company’s insolvency, our team can give you clear advice on your position and the options open to you.
We have offices across Cambridgeshire, Essex and Hertfordshire, but we can help you wherever you are in England and Wales.
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What our clients say
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“Ana James-Pittau is one to watch – she is calm under pressure, astute, and across the details of a case and beloved by clients. Her legal knowledge is impeccable and achieves fantastic results for clients: diligent, robust, and commercially minded – she is highly respected by her peers. She is quick to adapt to a changing factual landscape and ensures that clients are always offered fantastic service and the best route to achieve their aims.”
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Insolvency and corporate recovery
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“The partner responsible for managing our work (David Perry) always makes himself available to discuss matters when we require him, and we have every confidence in his ability to think his way around any problem.”
Legal 500 2027
Commercial litigation
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“Very competent and professional. Explained things clearly and gave sound advice and recommendations. Strong communication – responsive and timely.”
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Claims against directors FAQs
What is wrongful trading?
Wrongful trading arises where a director continues to trade a company beyond the point at which they knew, or ought to have known, that there was no reasonable prospect of avoiding insolvent liquidation or administration. A liquidator or administrator can apply to the court for an order requiring that director to contribute to the company’s assets.
Can a director be held personally liable for company debts?
A company is a separate legal entity, so directors are not usually personally liable for its debts. However, in an insolvency context, a director can become personally liable where their conduct falls within claims such as wrongful trading, fraudulent trading, misfeasance or unlawful dividends. Personal liability depends on the director’s specific conduct, not simply the fact that the company has failed.
Who can bring a claim against a director?
Claims are usually bought by a liquidator or administrator on behalf of the insolvent company, but they may also be pursued by creditors directly in certain circumstances, or by a party to whom the claim has been assigned.
If you have a question about a potential claim against a director, or you are a director facing an insolvency-related claim, please get in touch with our insolvency and corporate restructuring team.
You might also need
If your business is facing the prospect of insolvency, our legal experts will respond quickly and effectively, giving strategic advice and offering full support and guidance throughout this difficult and often complex process.
All businesses consider restructuring at some point. Whether they want to streamline, prepare for sale, merger or de-merger, change their financial structure, refinance or saving costs.
Differences over direction, personality clashes, misconduct, and conflicts of interest are not uncommon. Often these disputes can impact the effective running of the company, so it is important to get expert advice as soon as possible.
Businesses face increasing pressure from regulators, and compliance is becoming a critical part of commercial activity. Businesses and individuals must comply with regulatory bodies or risk penalties and reputational harm.
Frequently asked questions
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