The Predicaments of UK Wrongful Trading Liability in Insolvency: Implications for Nigeria and Proposal for a Resilient Approach

Despite the intentions behind the UK's directors' wrongful trading liability provision, scholars agree that it has fallen short of its compensatory and deterrent objectives. The liability provision suffers from a low enforcement rate due to difficulties initiating claims in court, proof of intent against the director, and the impact of the provision on the directors to seek rescue measures in the insolvency vicinity. The article adopts the doctrinal research method to show that the formulation and enforcement of wrongful trading in the UK have occasioned risks, stress, uncertainty, and dilemmas among directors, liquidators, courts, and policymakers. The article argues that the risks, dilemmas, and uncertainty occasioned by wrongful trading liability are comparable to the symptoms and manifestations that resilience seeks to overcome. Because of this, Nigeria should adopt a resilience strategy of adjusting to risks, change, frustration, and dilemmas as a model for adaptation and dealing with the lessons discovered from the UK's wrongful trading liability experiences. The study is beneficial for providing resilient goals, resilient statutory provisions, and resilient enforcement mechanisms for Nigeria to implement towards the efficacy of the transplanted UK wrongful trading liability provided under the Companies and Allied Matters Act (CAMA) 2020 in Nigeria.