View from City Road: A case the DTI could not win

Another day, another case of copious quantities of egg on face for the Department of Trade and Industry. Bringing cases for disqualification against company directors who have both the determination and the money to fight has always been notoriously difficult. In Tony Berry's case, it was perhaps even more so.

Many would argue that this was a case that should never have been brought. Certainly, Mr Berry was preaching it powerfully yesterday. Having ordered an investigation which found that Mr Berry's conduct fell short of what was expected of a public company director, the DTI would, however, have found itself equally heavily criticised had it done nothing. Either way, this was a case the DTI could not hope to win.

Not to be deprived of his moment of triumph, Mr Berry was flogging the DTI's embarrassment for all it was worth yesterday. He accused the department of publishing a flawed report and of persecuting him over the two-year period of its investigation for no good reason.

The vast majority of cases brought under the Company Directors Disqualification Act 1986 are on the recommendation of the official receiver or commercial liquidators against people made bankrupt or directors of insolvent companies.

Rarely does the DTI try to disqualify for anything else. No action was, for instance, taken against Ernest Saunders and other Guinness defendants found guilty of commercial dishonesty on a grand scale. It was always hard to see, even assuming DTI inspectors were right about him, why Mr Berry should have been singled out in this way. Hard to see why, easier to explain. The DTI, after all, had to be seen to be doing something.

The action against Mr Berry was brought under Section 8 of the Act, which deals with people who have been criticised in a DTI report. The President of the Board of Trade then took advice from leading counsel and decided to launch proceedings against Mr Berry.

The DTI was always going to be on a sticky wicket but it became steadily more so as the case progressed. A number of witnesses who had been willing to give evidence in private said they were not willing to say the same thing in open court. The DTI also cites new evidence provided by Mr Berry in May, although he says it was merely his lawyers stressing key material that had already been provided.

The DTI certainly has a lot of explaining to do. Besides allowing so much public money to be wasted, there is also the wider question to be answered - why go for Mr Berry when others with rather weightier allegations to answer go untouched? As with so much else, the DTI urgently needs to rethink the procedures and methods it uses for disqualification.