On 12 February 2026, ICC Judge Barber gave judgment in The Secretary of State for Business and Trade v Sehar Pal [2026] EWHC 262 (Ch). It was a claim for a disqualification and compensation order under the Company Directors Disqualification Act 1986 (“the Act”) arising out of an inflated application for and misuse of a Bounce Back Loan.
The case is of particular note as one of only a handful of cases on the court’s discretion to make a compensation order under s.15A of the Act.
The Defendant invited the court to dismiss the claim for a compensation order on the basis of her impecuniosity. The Judge declined that invitation. She found that there was insufficient evidence to justify a finding of impecuniosity.
More importantly, however, at [143] she stated that “the mere fact that a disqualified director facing a compensation claim may be impecunious does not lead inexorably to the conclusion that the compensation claim should be denied.” In her discussion, she explained the need to place one of Deputy ICC Judge Parfitt’s more generous comments in Re St Aimie’s Sports Academy [2024] EWHC 3137 (Ch) into the context of his whole judgement. As such, this latest decision highlights and confirms the court’s fairly robust view of the compensation jurisdiction, and willingness to make such an order where the necessary causal link has been established.
Another point of note is the judge’s treatment of the Defendant’s attempts to repay the Bounce Back Loan after the Company had been dissolved. On this issue, she found that the attempts to repay were not relevant to the court’s decision on whether the Defendant was unfit (which is a retrospective exercise). However, it would be relevant to deciding the appropriate period of disqualification (see [107]). That said, she also stressed that “Defendants facing BBL disqualification claims of this nature cannot expect to be able to ‘horse-trade’ their way out of a lengthy disqualification simply by offering to repay the BBL to the Claimant at the eleventh hour.” [130]
Sarah Walker appeared for the Secretary of State and obtained a disqualification order for a term of 11 years and a compensation in the sum of £50,000 plus interest.
To view the full judgment, please click here.
To read more about Sarah’s practice, please click here.
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