City firms join attack on rogue company directors

FRAUD: Scheme targets rogue directors of failed businesses

Law firms Moon Beever, Davies Arnold Cooper and Howes Percival are piloting a novel scheme that promises to 'hit rogue directors where it hurts' - but might also strike their lawyers.

The three London firms are joining a multi-disciplinary forensic insolvency recovery service (FIRS) team also made up of barristers, insolvency practitioners and enquiry agents.The Official Receiver launched the FIRS team to pursue cases on a 'no win, no fee' basis where personal actions against rogue directors are possible.

The Inland Revenue and Customs & Excise are backing the initiativeNick Oliver, insolvency partner at Moon Beever, the London office of international firm ShaunCoulson, said fraudulent or negligent directors of failed companies are the group's primary target, but that professionals involved in the insolvency process, including lawyers, may be caught in the cross-fire.

The firm's London managing partner, Frances Coulson, added: 'We will be looking for a target which has some assets, and a reasonable cause of action.' FIRS is the brainchild of licensed insolvency practitioner Tim Bramston, who advocates the aggressive use of liquidators' powers to investigate and bring actions against delinquent directors and solvent third parties.

Mr Bramson said: 'Directors are an obvious target for litigation following business failure.

However, there may also be actions that lie against connected family members, third parties and professional advisers.'Each incoming case is a potential referral for the Insolvency Service, part of the Department of Trade and Industry.

Its London, South Eastern and East Anglian offices will identify cases for the FIRS squad.

Anne Mizzi