Vol 17 (2020) - Issue 3

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The Position of UK Directors during the COVID-19 Pandemic

Synopsis

In the current pandemic and consequent lockdown UK company directors face many challenges and risks. The government has recently announced that wrongful trading liability under Section 214 of the Insolvency Act 1986 will be suspended for an initial period of 3 months in order to alleviate directors' concerns about personal liability when deciding whether or not to continue trading. However, other duties and routes to personal liability remain in place and directors are by no means 'off the hook'. This article examines the impact of the suspension of wrongful trading liability and gives some advice on best practice for directors seeking to minimise the risk of liability should the company later enter an insolvency proceeding.