Research Handbooks in Financial Law series
Edited by Barry Rider
Chapter 59: Disqualification of those engaged in the management of companies and financial institutions
This chapter gives an introductory account of the disqualification regime in the UK’s Company Directors Disqualification Act 1986 (‘the CDDA’). The CDDA is a paradigm example of a mature ‘disqualification’ system having the following characteristics: 1. Ex post regulation of directors and managers based on proven misconduct in connection with the management of companies or cognate entities rather than ex ante regulation in the form of barriers to entry (such as training and qualifications). 2. The use of civil powers of disqualification in addition, or as an alternative, to criminal sanctions. 3. The ability to target and sanction ‘unfit’ conduct that encompasses but is broader in scope than criminal misconduct. 4. Investigation of misconduct and commencement of court proceedings by a state agency. 5. Sanctions that not only prohibit the disqualified person from being or acting as a company director or manager without the court’s permission but also restrict that person from engaging in an extensive range of other professional roles and activities. Several jurisdictions have developed similar regimes that share some or all of these features. Examples include: Australia; Ireland; Hong Kong; New Zealand;Singapore; South Africa; Sweden; and various offshore jurisdictions. Other jurisdictions take a more limited approach. The United Kingdom has had disqualification legislation since 1928. On the recommendation of the Cork Committee in 1982, the miscellaneous provisions then on the statute book were consolidated and strengthened by the enactment of the CDDA. The CDDA applies to England and Wales and Scotland.
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