High Court rejects strike-out bid in Greensill director disqualification case

The High Court has refused to strike out disqualification proceedings against Lex Greensill, clearing the way for a full trial on allegations of director misconduct arising from the collapse of Greensill Capital’s UK entities.

In a judgment addressing a series of threshold challenges, Mr Justice Trower dismissed Mr Greensill’s application to strike out or summarily dispose of claims brought by the Secretary of State under section 6 of the Company Directors Disqualification Act 1986 (CDDA). The proceedings stem from the 2021 insolvencies of Greensill Capital (UK) Ltd and its subsidiary Greensill Ltd, which formed part of the wider Greensill group collapse.

At the centre of the application was a legal argument that the Secretary of State must prove a causal connection between the alleged misconduct and the companies’ insolvency. Mr Greensill contended that disqualification under section 6 requires at least some non-trivial “connectivity” between the director’s conduct and the causes of insolvency, and that the absence of such a case rendered the proceedings defective.

The Court firmly rejected that interpretation. It held that section 6 imposes only two jurisdictional requirements: that the company has become insolvent (or been dissolved), and that the director’s conduct renders the director unfit. Responsibility for the causes of insolvency is not a threshold requirement, but one factor among many to be considered when assessing unfitness and the appropriate period of disqualification.

In reaching that conclusion, the Court emphasised the statutory structure of the CDDA, particularly section 12C and Schedule 1, which require the Court to consider a range of factors, including but not limited to causation. Elevating causation to a mandatory precondition would distort the legislative scheme and introduce an unwarranted jurisdictional hurdle.

The judgment also rejected arguments that the Secretary of State had acted unlawfully by bringing proceedings without establishing causation, or by allegedly shifting position during the investigation. The Court found no evidence that the decision to proceed was improperly taken or that any alleged change in emphasis rendered the proceedings invalid.

Mr Greensill further argued that the case should be struck out as an abuse of process due to unfairness in the Insolvency Service’s investigation, including failure to obtain potentially exculpatory material and reliance on incomplete evidence. The Court declined to intervene, holding that while the Secretary of State must act fairly, there is no duty to exhaustively investigate third-party evidence, and any evidential gaps can be tested at trial.

Finally, the Court dismissed complaints that the presentation of the case blurred allegations of misconduct with broader causes of the group’s failure. It held that the financial context of the companies’ collapse was relevant background, and that Mr Greensill had sufficient notice of the allegations and opportunity to respond.

The case will now proceed to a six-week trial scheduled for June 2026, where the substantive allegations against Mr Greensill will be determined.

Read the decision here.

Professionals involved:

• David Mohyuddin KC of Radcliffe Chambers, Carly Sandbach of Selborne Chambers and Isabel Petrie of Selborne Chambers (instructed by Howes Percival) for the claimant, the Secretary of State for Business and Trade

• Ian Winter KC of Cloth Fair Chambers and Hilary Stonefrost of South Square (instructed by Ellerman) for the defendant, Alexander David Greensill