The Times have reported today an increase in reports to the Insolvency Service about directors from 3539 in 2002 to 7030 in 2009. The number of directors disqualified has decreased from 1594 to 1387.
The Insolvency Service budget has fallen as well from £9305 to £4097 per case since 2002. According to The Times the lack of resources means that investigators will only take cases that are considered to be "low hanging fruit" leaving the more serious violations unpunished.
From a breach of duty point of view it may provide further evidence that although the ways in which directors may be subject to liability the likelihood of that ever being a worry for a director is minimal. More practical ways in ensuring directors are not acting in breach of duty or not fulfilling their non-fiduciary duties are needed. Merely making directors more liable will not prevent those with an intent to breach duties regardless of any ethical codes of conduct. Accidental breach their duties will continue to occur for reasoning of generality of the codified statement or misinterpretation of it.
What more practical ways may work is unclear. An early thought may be something similar to compliance programs that you see as a method to prevent breaches of competition law. Further research would be needed for more recommendations however.
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