The UK Government has opened a consultation on plans to reform the corporate civil enforcement regime.
The plans, stated as the biggest change in almost four decades, aim to better protect creditors, uphold market integrity and modernise tools for tackling corporate abuse.
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In response, the Institute of Chartered Accountants of Scotland (ICAS) stated that it will examine the consultation proposals in detail and engage its members on the potential implications.
The consultation, titled Corporate Civil Enforcement Reforms, sets out 11 proposals to change how the Insolvency Service probes and tackles corporate misconduct.
The current framework for civil enforcement – including director disqualification and powers to wind up companies in the public interest – has remained broadly the same for around 40 years.
Over that time, corporate structures, business models and forms of economic crime have grown more sophisticated, while expectations around governance and accountability have also shifted.
The Insolvency Service’s responsibilities have expanded in recent years, especially after the Economic Crime and Corporate Transparency Act 2023.
Its role now includes more proactive intervention, including in relation to live companies, rather than only those already in insolvency.
Despite this wider remit, the government argues that the existing toolkit does not offer enough flexibility to respond proportionately across the full range of misconduct now seen in the market.
The consultation includes reforms aimed at strengthening public protection, boosting deterrence for directors, streamlining enforcement to cut delays, and ensuring fair and proportionate outcomes.
The changes will also bring the UK regime into line with international best practice, including World Bank and UN Commission on International Trade Law principles.
The package is designed to apply in England and Wales, with several measures also envisaged for Scotland, where elements of insolvency and company law are “partly reserved and partly devolved”.
