Can a director represent a company in court proceedings?

The Secretary of State petitioned for the winding-up of a company on the grounds that it was in the public interest to do so (s124A Insolvency Act 1986). The question was whether a director of the company was entitled to represent the company in court proceedings.

The director's arguments included the contention that, under Article 6 of the European Convention on Human Rights, the company had an inalienable right to be represented in court by one of its directors. Article 6 gives everyone a right to a fair trial. With regard to this argument, Lord Hodge acknowledged companies can be victims in terms of the Convention. That did not necessarily mean, however, that in relation to representation in court a company should be treated in precisely the same way as a party litigant. A company as a legal person is not the same as a natural person. Where a person chooses to obtain the benefits of limited liability by trading through the medium of a registered company, he has also to accept the disadvantages to which separate legal personality gives rise. Thus as a general rule Lord Hodge saw no incompatibility between Article 6 and the requirement that a company be represented in court not by a director but by a suitably qualified legal representative who has responsibilities to the court and who is subject to professional discipline.

The judge considered, however, that exceptional circumstances may arise in which the court has to take steps to allow a company to be represented in court in order to ensure a fair hearing under Article 6. The Rules of Court do not provide for such a circumstance but the court had an inherent power to regulate its own procedures which it could use in this context. The judge said that there had to be careful consideration of the circumstances in which the court may authorise a person who is not a lawyer with rights of audience to represent a company. It is likely to require the court to hear well thought out submissions from interested parties. He therefore decided to report the issue to the Inner House for its opinion.

Brodies represented the Secretary of State in this case. We will provide an update when the Inner House opinion has been given.

Case: Secretary of State for Business, Enterprise and Regulatory Reform v UK Bankruptcy Ltd.