delete The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020
Temporary pandemic measure suspending director liability for wrongful trading under Insolvency Act 1986 sections 214 and 246ZB. During the 'relevant period' (26 November 2020 to 30 June 2021), courts must assume directors are not responsible for any worsening of the company's financial position. Excludes banks, insurance companies, investment firms, electronic money institutions, payment institutions, and various other financial entities from eligibility.
This pandemic-era temporary suspension of wrongful trading liability has already expired (ended June 30, 2021) and should be deleted rather than remain on the statute book indefinitely. Beyond its obsolescence, the regulation creates perverse incentives: it shields directors from the consequences of continued trading during insolvency, effectively transferring risk from directors to creditors. The wrongful trading provisions exist precisely to deter directors from gambling with creditor assets when recovery is unlikely—suspending this deterrent during COVID likely worsened creditor outcomes. Keeping expired, sector-specific COVID interventions on the statute book serves no ongoing purpose and maintains a precedent of overriding insolvency law for political convenience.