The FCA has now published proposed amendments to its (the IP guidance). Our previous article highlighted the significance of the Consumer Duty in the financial services industry and how firms will need to view customer outcomes and proactively address harm in the retail market.

The Consumer Duty is one of the most significant pieces of regulation to land in the financial services industry for some time and represents a major shift in how firms will need to view customer outcomes and proactively address harm in the retail market. For Insolvency Practitioners (IPs) appointed over a regulated firm that has products within the scope of the duty, this will form part of the regulatory obligations with which the firm (and the IP) will need to ensure compliance.

Over the past few weeks, the UK government, regulators and other bodies have moved to help businesses navigate the unprecedented disruption caused by the COVID-19 pandemic. We start this briefing with a round-up of key changes in the areas of company law and corporate finance regulation.

Filing accounts

The Court of Appeal has considered whether interim dividends paid to a shareholder at a time when the company did not have sufficient distributable reserves, making the payments unlawful, could later be reclassified as salary payments.

Facts

The Court of Appeal has given guidance on when the duty of directors to have regard to the interest of creditors arises. This is an important point, as the general statutory duty of a director to promote the success of the company for the benefit of the company's members is expressly subject to the rules on creditors' interests. The court's decision also considers whether a dividend payment can be challenged as a transaction at an undervalue under section 423 of the Insolvency Act 1986.

Facts

A recent challenge in the High Court by liquidators to recover assets from a director of an insolvent company has highlighted various points of company law. In particular, the court had to consider directors' authority, share buybacks, and transactions between a company and its directors.

The claimant (D) was the managing director and controlling shareholder of the defendant company (the Company). The Company at first had one other director, D's wife, and later a second (W).

The liquidator challenged three transactions: