A significant rise in criminal prosecutions of company directors indicates that the Insolvency Service is raising the stakes when it comes to pursuing the most egregious cases of wrongdoing. While typically the sanctions for a rogue director would be limited to disqualification proceedings, a small but growing number of directors are finding themselves facing criminal prosecution as a result of Insolvency Service action - with 122 convictions in the year to 30 September, compared to just 40 in the same period for the previous year.

It seems likely that this reflects, at least in part, the public policy imperative to clawback monies lost to covid-related fraud, and ensure that wrongdoers are brought to justice. While government backed support schemes may have been a lifeline for many genuine businesses, they were also an open goal for fraud. The Bounce Back Loan Scheme in particular has gained notoriety for its limited underwriting checks, leading to widespread abuse. The National Audit Office has estimated that over 50% of the £46.5 billion lent under the BBLS could be lost to fraud if the government fails to pursue a robust approach to debt collection and fraud investigation. 

All the signals from the Insolvency Service indicate an increasingly hardline approach to covid-related fraud - although whether they have the resources to pursue more than a handful of the worst offenders remains to be seen. Rogue directors should take note however - if nothing else, these figures indicate that, when called for, the Insolvency Service is not afraid to show its teeth.