Question to the Department for Business, Innovation, Science and Trade:

To ask the Secretary of State for Business, Innovation, Science and Trade, what assessment the Department has made of the adequacy of protections against legal costs for former company directors facing claims brought by liquidators and those litigation funders to whom liquidators assign claims.

Liquidators are qualified and regulated professionals, subject to statutory duties, professional standards, and court oversight.

Civil Procedure Rules provide for court scrutiny and control of legal costs, including powers to disallow costs based on proportionality, reasonableness, and conduct of the parties. Where appropriate, defendants may apply for security for costs. Such matters remain subject to the court’s discretion.

A range of litigation insurance options are also available to directors.

As such, the Department considers that existing legal and regulatory safeguards provide appropriate protection against legal costs for former company directors facing claims brought by liquidators or assigned to third parties.