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Business Crime: Criminal Law Defence of Directors and Business

Directors and other company officers never imagine that their entrepreneurial endeavours, in running a limited company business, might end in the insolvent failure of their business, much less the very real prospect of a criminal law investigation and a criminal prosecution, that can leave the Director finding himself/herself in the dock in a Magistrates Court or the Crown Court, facing:

  • Imprisonment and/or a Fine; and/or
  • Director Disqualification; and/or
  • Other criminal law penalty; and/or
  • A criminal record.

A criminal record has wide ranging consequences

Apart from the punishment handed out by the Court to the Director found guilty of an offence, the Director then finds him/herself with a criminal record, with the stigma of that, as well as the practical consequences of that criminal record such as the very painful and problematic issue of time away from family or business (if imprisoned), the impact on raising finance and travel restrictions (for example, to the USA).

Our experienced in-house team

That ‘People deal with people’ is as true as ever.  We are user friendly and hugely experienced.  Your best possible outcome remains our targeted objective.

The Defence Team is headed up by David Hanman, a leader in this field of work who is assisted by NDP Director, Neil Davies, and the rest of the 10 strong NDP Team of Solicitors and Paralegals, all with experience of this type of specialist work.

David’s 30 year plus experience of criminal defence work is matched only by his passion and enthusiasm for representing Directors and persons (to include businesses) facing criminal law investigations.  Add to that Neil’s skill set of 33 years’ experience of insolvency and business law and we believe we have an unrivalled base from which to advise Directors and businesses.

The NDP Team works with a close-knit group of specialist criminal defence Barristers, when Court representation for our clients is required or anticipated. Planning the Defence strategy as early as possible may involve Barristers at an early point, to maximise the prospect of achieving the best client outcome. These Barristers work as an extended part of the NDP Defence Team. They add real value to the position of our clients.

  • A free of charge initial discussion with the Director (by telephone, Zoom or face to face) to discuss the problem.   Is there synergy between the Director and us?   This is vitally important where the Director’s liberty or the reputation of a business may be on the line.  We and the client have to buy into each other.
  • Advice on the merits of the criminal law investigation and the lines of Defence (legal and practical) that may be available to the Director/the business.
  • Tactical analysis and a decided upon, strategic approach to the Defence.  That may involve, for example, obtaining third party Witness Statements from key witnesses of fact and from professional advisors (for example, Accountants), at a very early point.
  • Advice on how to best prepare the Director (on the facts of each particular case) for an interview under caution. That may involve a ‘no comment’ or prepared statement approach to the interview.  That approach will always be fact specific depending on the facts of each case.
  • Representation by David Hanman or a senior, experienced Solicitor for the Director, in the interview under caution.
  • Decades of experience, that enables us to speak frankly with the Investigator/Prosecutor, to try and achieve the Director’s objective, without the need for an extended and worrying prosecution process. 
  • Obtaining the best, most experienced Barrister for representation of the Director at Court.
  • Preparation of Mitigation Statements.
  • Be available when you need us, by telephone, in person or electronic media.  We are here to advise and support you.  That support will often be needed outside of office hours.   We are here for you.

The Companies Act 2006 (‘CA’) and the Company Directors Disqualification Act 1986 (‘CDDA’) contain very many criminal law offences, a number of which may attract the punishment of imprisonment, if proved.

EXAMPLES

  1. Alleged breach of Director Disqualification Order, contrary to sections 1A and 13 of the CDDA.

Penalty on conviction: As per section 13, conviction on indictment imprisonment for not more than 2 years or a fine, and on summary conviction, to imprisonment for not more than 6 months or a fine not exceeding the statutory maximum, or both.

          COMMENT

          We have significant experience of successfully advising in such cases.  Neil’s huge experience of advising in Director Disqualification issues adds enormous benefit.

  • Alleged use of Prohibited Name, contrary to sections 216 and 217 of the Insolvency Act 1986.

Penalty on conviction: Section 216 provides for a fine, a term in prison or both.

Section 217 also provides for personally liable on the Director for the debts and liabilities of the new company/business with the prohibited name, for the period of time of the involvement with that company.

          COMMENT

          Again, the NDP Insolvency Team has unrivalled experience in advising on the effect of these sections.

  • Books and records failures by the Director

This allegation can be (and is) often pursued by investigators as a civil law and criminal law offence.  The former may attract Director Disqualification consequences.   NDP is best placed to advise. 

The allegation against the Director is often an allegation of failure to preserve company accounting records for 3 years from the date on which they were made (contrary to section 387(1) of the CA. 

And/or failure to deliver up to the Liquidator of the company all books and papers belonging to the company which were in the Director’s control and that he was required by law to deliver up, contrary to section 389 of the CA.

Penalty on conviction: Section 387(3):-

  1. on conviction on indictment, to imprisonment for a term does not exceed 2 years of a fine (or both).
  • on summary conviction, in England & Wales, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or both).
  • As an officer of a company, failing to cause the company to keep accounting records that were sufficient to show and explain the transactions of the company, contrary to section 387(1) of the CA.

Penalty on conviction:  Section 389:

a.       on conviction on indictment, to imprisonment for a term does not exceed 2 years of a fine (or both).

b.       on summary conviction, in England & Wales, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or both).

OUR INSOLVENCY AND BUSINESS LAW EXPERIENCE

  • This is what we do, day in and day out. The NDP Team has a combined experience of over 120 years of successfully advising Directors faced with seemingly insurmountable problems. 
  • Our understanding of insolvency law and practice borne out of 120 combined years of experience, gives us an enormous advantage over our competitors when advising in these cases. 
  • Neil, David and Sukhbir Mall (an NDP Director – CRAIG INSERT LINK) advise Insolvency Practitioners, Lenders, private individuals and business clients every single day.  
  • Neil and Sukhbir have historically advised the Insolvency Service on Director Disqualification issues. We know what they want and how to achieve best outcomes for our clients. In addition, ‘Neil is a contributor to Mithani on Directors Disqualification, the industry leading text on duties owed by directors to their companies.

David Hanman and the NDP Team can and do assist in most types of investigations and prosecutions, including:

  • Undischarged bankruptcy offences.  It is a criminal offence for an undischarged bankrupt to act as a Director, or in the management of a limited company, without prior permission of the Court.
  • Defence of company Directors, their companies and their employees in other CA and CDDA allegations to include Fraudulent trading.  This is the carrying on of any business or company, with the intent to defraud creditors for any fraudulent purpose.
  • Wider fraud work, to include in particular investigations and prosecutors by/on behalf of Her Majesty’s Revenue and Customs (‘HMRC’).
  • Tax investigations, to include COP9 Investigations by HMRC.
  • The NDP Team always carry a caseload of such cases for our clients.   We work with specialist Accountants on such cases, where (for example) there is a conflict of interest between the client and the Accountant, who has historically advised.   David Hanman also has a tax qualification that gives him a significant head start in this field of work.
  • Trading Standards investigations.
  • Health and safety investigations.
  • Environmental law investigations.
  • Money laundering and related Proceeds of Crime Act (‘POCA’) offences. David has particular expertise in this field of work.
  • The Department for Business, Energy and Industrial Strategy (‘BEIS’), aka the Insolvency Service.
  • The Insolvency Service.
  • Her Majesty’s Revenue and Customs (‘HMRC’).
  • Trading Standards.
  • Crown Prosecution Service (‘CPS’).
  • Serious Fraud Office.
  • Environment Agency.
  • Local Authorities.

FUNDING OPTIONS

  • Insurance funding.  We are well used to working with insurers and running defence cases with insurance funding.
  • Private funding

GEOGRAPHY

We represent clients based all over the UK and overseas.  Modern on line communications mean distance is never an issue.

Received a document? Contact us

If you have a query about any business crime related issue, or have already received documentation from the authorities indication their intention to investigate and/or prosecute please contact us call us on 0121 200 7040.  Ask to speak with Neil or David.  We are a Director led service.

Alternatively, feel free to email it to us in confidence at law@ndandp.co.uk or neild@ndandp.co.uk, give us your contact number and we will call you back, in or out of business hours.