The Insolvency Service has published an ambitious five-year Investigation and Enforcement Strategy, outlining its approach to tackling economic crime, director misconduct and abuse of corporate structures. The strategy sets out the Insolvency Service's vision to become a leading enforcement agency and take a more prominent role in tackling economic crime.

One of the main enablers of this strategic shift is the Economic Crime and Corporate Transparency Act 2023 (ECCTA) which introduces a sustainable funding model for the Insolvency Service through Companies House fee income. This financial underpinning supports an expansion in both staffing and operational capacity. ECCTA and its subsequent regulations created over 100 new offences, and the Insolvency Service's focus is extended beyond the investigation and prosecution of insolvency-related offences to encompass wider corporate misconduct, particularly in relation to fraud, money-laundering and the exploitation of limited liability structures.

The strategy reflects a move away from reactive enforcement towards a more intelligence-led, preventative model. The Insolvency Service will increasingly use data analytics and AI to identify patterns of misconduct and intervene before harm escalates. It is investing in a new intelligence database to increase its ability to identify, target and disrupt the misuse of corporate entities to commit crime.

The Insolvency Service's central role in addressing director misconduct will continue, both through pursuing director disqualifications and criminal investigations, and identifying and acting against directors who breach disqualification orders and undertakings. However, there is also a welcome focus on raising awareness among directors of their duties, including by building on their director education hub and working with key partners to inform directors of their obligations.

The strategy looks to build and deepen relationships between the Insolvency Service and key public partners, including HMRC and the National Economic Crime Centre. It also looks to deepen private sector relationships, in particular with a view to working with insolvency practitioners to improve the quality of director conduct reports and associated enforcement action.

While the strategy does not introduce new powers, it reflects a meaningful operational shift. The Insolvency Service is now expected to play a more visible and assertive role in upholding corporate standards. Directors should be aware that their conduct will face greater scrutiny. For insolvency practitioners the strategy may present challenges - in particular in responding to the expectations around improving quality of reporting and enforcement - however opportunities for collaboration with a more proactive and well-resourced Insolvency Service will no doubt be welcomed.