City Link Directors charged over Christmas Collapse

Three former directors of the parcel delivery firm City Link have been charged in connection with the company’s collapse last Christmas. The men are accused of failing to follow proper procedures in the wake of the company’s failure.

Sky news revealed that administrators were called in on Christmas Eve last year which put thousands of jobs at risk. It was later confirmed that more than 2,700 staff, along with contractors, had lost their jobs. The directors have been accused of failing to notify the Business Secretary over plans to make redundancies. This sparked a better blame game involving unions and MPs.

A Department for Business, Innovation and Skills spokesman confirmed last night that: “Criminal proceedings have been commenced against David Smith, Robert Peto and Thomas Wright. They are charged with offences contrary to Section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992.  We will not be commenting until the criminal proceedings have been concluded.”

If found guilty, the directors could face expensive settlements and legal costs which they will have to pay out of their own pocket if they don’t have the right insurance.

At JSW Insurance, we offer Directors and Officers Insurance specifically for cases like this. Directors and Officers Insurance cover the cost of compensation claims made against directors and other key managers in a business.

Being in a position of responsibility brings about specific responsibilities, duties and power. If a director or officer is found to have acted wrongfully, then civil, criminal or regularity proceedings may be brought against them as it was in the case of City Link. Compensation claims could be made by shareholders, investors, regulators, employees and third parties.

Director and Office Insurance can protect you against a wide range of wrongful acts like:

  • Breach of trust
  • Breach of duty
  • Neglect
  • Misleading statements
  • Wrongful trading

If you have any questions relating to Directors & Officers Insurance, speak to a member of our friendly team or to get a free quote at 01782 607709. We will be able to give you more details about what the policies have to offer.