An Analysis of the Statutory Regulation of Fraudulent Trading

Abstract

Fraudulent trading is a concept embodied most unusually in two almost identical provisions on the Statute Book. From its humble beginnings as a single umbrella provision used as a means by which creditors recouped their assets and delinquent directors who defrauded creditors were punished, it has morphed and evolved. This evolution has produced two separate provisions in the civil and criminal arenas and has given rise to academic uncertainty surrounding the purpose, meaning and future of fraudulent trading.

Setting the scene and context surrounding the notion of fraudulent trading enables these questions to be then more easily addressed and it is highlighted that it is an unusual but worthwhile tool as a means of recovering assets. Questions still remain over whether criminal fraudulent trading will (eventually) perhaps eclipse its civil law statutory sibling given its procedural and jurisprudential advantages, immense prevalence and the post-conviction options now available to the Courts provided by recent legislation. In the final analysis however, Parliamentary resolve will be required for this to occur and it does not, at the moment, appear to be forthcoming.