Legal News | 2.06.26

High Court clarifies scope of director disqualification claims

The High Court has confirmed that a director can face disqualification proceedings even where the alleged misconduct did not cause the company’s insolvency.

In Secretary of State for Business and Trade v Greensill [2026] EWHC 639 (Ch), the court rejected an attempt by a former Greensill director, Alexander Greensill, to strike out proceedings brought under section 6 of the Company Directors Disqualification Act 1986 (“CDDA 1986”).

The decision gives useful guidance on how the courts are likely to approach director disqualification claims.

Background

The Secretary of State brought proceedings alleging that Mr Greensill’s conduct as a director made him unfit to be involved in the management of a company.

Mr Greensill applied to strike out the claim (or obtain reverse summary judgment) on the basis that the Secretary of State had not alleged, and could not prove, that his conduct caused the insolvency of the relevant companies.

He argued that there must be some meaningful connection between the alleged misconduct and the company’s collapse before a disqualification order can be made under section 6 CDDA 1986.

The High Court’s decision

The High Court rejected the strike‑out application and held that section 6 contains two separate requirements:

• The individual must have been a director of a company which became insolvent (or was dissolved); and
• The director’s conduct must make them unfit to be concerned in the management of a company.

Mr Justice Trower held that the legislation does not impose an additional obligation to prove that the director’s conduct caused the insolvency. Responsibility for the causes of insolvency remains relevant, but only as one factor among several when assessing unfitness and the appropriate period of any disqualification order.

Why the decision matters

The judgment makes clear that director disqualification proceedings extend beyond identifying who caused a company to fail. A director may still face disqualification where their conduct demonstrates unfitness, even if the company’s insolvency resulted from other factors.

Practical implications for directors

The decision is likely to strengthen the position of the Insolvency Service and the Secretary of State in director disqualification cases.

It may also make it more difficult for directors to defeat claims at an early stage by arguing that their conduct was not responsible for the company entering insolvency.

Directors should be aware that the court will take a broad view of conduct affecting standards of corporate governance, honesty and stewardship, rather than focusing solely on the immediate causes of a company’s collapse.

For directors, the key point is that conduct and governance may come under scrutiny even where they were not the direct cause of insolvency.

This article should not be relied upon as legal advice. If you would like specific legal advice or require any assistance, then please get in touch: 020 4549 2460 or 01380 733300 | commercial@wansbroughs.com