Being Sued

6. Criminal Proceedings

6.1 As well as being sued under civil law, the company and its officers can be prosecuted under criminal law.

You can be prosecuted under:

• Health and safety legislation. For example, if your business activities endanger public health.
• Consumer safety legislation. For example, selling unsafe goods.
• Licensing laws. For example, selling alcohol from unlicensed premises.
• The Companies and Insolvency Acts. For example, failing to keep proper accounting records.

6.2 Conviction can have serious repercussions.

For example:

• For offences connected with the Companies Act, directors can be disqualified from acting as directors for up to 15 years.

6.3 You must pay the costs of defending yourself. You may be able to reclaim these costs (but not any fines paid) from the company.

• Directors and Officers insurance is available to cover this risk.
• Legal Aid is only available to individuals, not to companies. To qualify you must fall within strict income and capital limits.
• Costs are relatively low in the magistrates court, but can be very high in Crown Court fraud cases.