How to defend a Misfeasance claim

According to section 212 of the Insolvency Act 1986, Misfeasance takes place when a director or ex-director has misapplied, misappropriated, retained or become accountable for a company's money or property.

Misfeasance is worse than maladministration as it means a director has brought creditors financial loss through bad behaviour, wrongdoing, misconduct, and or dishonesty.

Defending a Misfeasance claim can be stressful, and cost between £30,000 and £60,000 or considerably more.

Although the director and company are recognised as separate legal entities, in many instances the director is also a company employee.

Subsequently, directors are supposed to put the company's interests above their own. Moreover, they must always act with honesty and integrity, and promote the interests of the company.