A “section 16 letter” is formal notice that a disqualification claim will be issued. Our expert team can provide the help you need to work out if the claim can be defended and how best to respond to the allegations made. Call for a free consultation today.


Section 16 of the Company Director Disqualification Act 1986 states that notice of the intention to issue a disqualification claim must be sent to a director at least ten days in advance of the issue of proceedings. This process and the means by which the notification is given is commonly referred to as a “section 16 letter”.

It is vital if you receive one of these letters that you take it seriously and seek legal advice.

What must a section 16 letter set out?

The letter itself will

  • refer to Section 16 of the CDDA in its heading;
  • set out the ten day notification to issue legal proceedings although in reality, more time is usually available to make further representations if need be;
  • set out more about the disqualification procedure;
  • set out the allegations of director misconduct – the letter will provide a summary of the allegations against the director;
  • set out the period of disqualification they are seeking against the individual – this will range between 2-15 years. Within this period there are three distinct bands – 2-5 years, 6-10 years and 11-15 years depending on the seriousness of the allegations.
  • detail the ability of the director to provide a voluntary disqualification undertaking in order to avoid formal director disqualification proceedings

How we can help you

Section 16 CDDA letters are therefore very serious and legal advice is recommended to deal with them properly.

Every company which goes into liquidation is different and part of our role is to find out what happened and how this impacted on you. We can

  • request more time to deal with the allegations;
  • request access to company documentation to help respond to the allegations;
  • understand your role in the company along with other directors or managers;
  • discuss the legal claim against you and the allegations of misconduct
  • discuss the cost implications of the claim against you;
  • ask for the Insolvency Service’s draft affidavit evidence against the threatened director, together with all supporting information. The Insolvency Service are obliged to provide this as they can’t issue formal legal proceedings without it;
  • send a detailed response letter back refuting allegations and indicating that you will defend the disqualification claim;
  • negotiate a suitable voluntary undertaking if that is the right course of action and discussing legal costs of undertakings;
  • make sure you don’t expose yourself to the risk of a compensation order when agreeing a voluntary undertaking;
  • make an application for an individual to court for permission to remain as a director moving forward despite a voluntary disqualification undertaking; and
  • formally accept service legal proceedings if the decision is to defend any legal claim.

Each person’s circumstances are different

Every individual’s case is different. It is never a “one size fits all” when it comes to a threatened director disqualification claim. We know this from dealing with these cases for over 20 years.

At FWJ – our disqualification team will take into account your own unique circumstances on order to find the best outcome for you. For example;

  • whether you are employed or near retirement;
  • do you need to be a director moving forwards;
  • your age and future career prospects;
  • your ability to fund legal proceedings;
  • whether you are looking to sell or exit your business.

It is only when all your individual circumstances are taken in to account that we can find the solution which best works for you.

Our expert team of disqualification lawyers is here to assist you. Whilst section 16 letters can be frightening documents to receive, it doesn’t mean that a disqualification is automatically going to follow. We successfully defend many of these claims and get the threat of proceedings dropped. Let us help you too.

FWJ were very hands-on, getting involved from an early stage in seeking to avert an expensive set of litigation proceedings. I am more than happy to recommend their services, particularly when it comes to considering complicated issues or complex proceedings.

A client who was facing a liquidator claim for the improper withdrawal of sums from a company. We had the claim dismissed

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