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The creditors‟ protection principle is further enhanced in the UK Insolvency Act
1986 with the introduction of director‟s personal liability and other provisions on
wrongful and fraudulent trading. Although the Insolvency Act 1986 did not provide
for automatic disqualification of directors found to be unfit, provisions relating to
disqualification orders were further enhanced. 136 Subsequently, provisions relating to
directors‟ disqualification were expanded to include various aspects of directors‟
disqualification. Later, a separate Act, the Company Directors Disqualification Act
1986, was enacted in order to govern disparate facets of directors‟
disqualifications. 137
In the late 1980s and early 1990s, the goal of insolvency law has shifted from
assisting the company to wind up, to reorganising the company and saving the
business as far as it is possible to do so. During this period a new theme, the rescue
culture, emerged. This principle became more important with the Asian financial
crisis in 1998. Hence, the administration procedure was introduced in the Insolvency
Act and was later followed and modified by other jurisdictions.
4.2 Development of Corporate and Insolvency Laws
4.3.1 Introduction
Corporate insolvency law historically originated from the development of
bankruptcy law. Prior to the establishment of systematic bankruptcy procedures in
the early sixteenth century, creditors had to resort to the ordinary process of the court
to recover their debts. 138 Remedies afforded by insolvency law at the time were
either to seize the body or the effects of the debtor. 139 During that time, there was no
136 Schmitthoff Palmer’s Company Law above n39 at 18.
137 Ibid, at 18-19.
138 V Markham Lester Victorian Insolvency (Clarendon Press, Oxford, 1995) at Ch 6; Edward Abbott
Parry The Law and the Poor ( The Lawbook Exchange Ltd, New Jersey, 2004) at Ch III.
139 Goode above n79 at [1-05].
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