The new identity verification regime under the Economic Crime and Corporate Transparency Act 2023 is now in force (with a transition period running from 18 November 2025).  Most commentary has treated it as a governance and compliance reform. That is understandable. Directors and PSCs must verify. Filings may be rejected if they do not. There are civil and potentially criminal consequences. But for those of us who spend their time in disputes, the more interesting question is different:

What happens when verification status becomes relevant in court?

The answer is that it will not matter in routine cases. It will matter in the difficult ones.

Authority: the pressure point

A surprising amount of commercial litigation proceeds on assumed authority. The board is taken to have authorised proceedings. The director is assumed to have had power to act. The filing is treated as effective because it appears on the register. Those assumptions are rarely tested unless something has gone wrong.

Under the new regime, failure to verify carries consequences, including prohibition on acting and the risk that filings are rejected. It is not hard to see how that might be deployed in a contentious setting. If a director was unverified at the relevant time:

  • Was he or she entitled to act?
  • Were instructions properly given?
  • Is the filing relied upon actually effective?

Like the Mazur judgment, these arguments will not automatically succeed. Courts are unlikely to invalidate corporate life on purely technical grounds. But in disputes where authority is already under scrutiny — shareholder claims, boardroom fall-outs, contested restructurings — verification status provides an additional line of attack. Litigators should expect to see it pleaded in some cases.

The evidential status of the register

For years, Companies House has been both relied upon and treated with caution. Judges know that the register has historically been vulnerable to inaccuracy.

The stated policy objective of the reforms is to change that. To move Companies House from passive recipient to active gatekeeper. If identity verification functions as intended, the register becomes harder to dismiss as merely formal. That has forensic consequences.

In fraud and misfeasance claims, parties often attempt to distance themselves from corporate acts. “I was not really in control.” “I did not know.” “The paperwork does not reflect reality.”

A register underpinned by verified identity does not end those arguments, but it makes them less comfortable.

Equally, where verification has not occurred, that gap may become part of the narrative — either as evidence of disorder, or as a basis for arguing that formal status was incomplete.

The register moves from background document to potential evidential anchor.

Insolvency scrutiny

In insolvency, everything is reconstructed after the event. Office-holders scrutinise who was in office, who took decisions and whether statutory obligations were respected in the period leading up to collapse. Identity verification will inevitably feature in that review.

If a director acted while unverified, that may not in itself establish breach of duty. But in a misfeasance claim or wrongful trading application, it may sit alongside other alleged failures as part of a wider picture of disregard for statutory requirements. For those advising directors of distressed companies, verification is unlikely to be the decisive issue. It may, however, become one more fact that is difficult to explain away and may tip the scales.

Rejected filings and transactional fall-out

One of the more practically significant changes is the Registrar’s enhanced power to reject filings linked to unverified individuals. In transactional contexts, filings are often treated as administrative steps to be completed shortly after signing or completion. That assumption is now less safe. If a filing is rejected because a director has not verified:

  • a board change may not take effect when expected;
  • a restructuring step may stall;
  • completion mechanics may become contentious.

Where timing is critical — including in property or financing transactions — that kind of disruption can generate dispute between counterparties. Identity verification therefore has the potential to migrate from compliance issue to litigation trigger.

Professional risk

There is a more everyday point. Solicitors advising corporate clients should treat verification as part of the basic pre-condition to lawful office-holding. Advising a client to proceed with significant acts while verification is incomplete carries avoidable risk if authority is later challenged.

Firms acting as authorised corporate service providers will need to be comfortable with the robustness of their processes. As the register acquires greater credibility, errors are less likely to be brushed aside as mere formalities.

Law firms themselves, where incorporated, are not exempt from the regime. It is an awkward position to be defending governance failures in clients while overlooking them internally.

Overseas directors and interim periods

Companies with overseas directors may encounter practical delays in verification, particularly where documentation and biometric processes are not straightforward. In many cases that will simply require additional planning. In a dispute, however, an interim period during which verification is incomplete may attract attention.

If material decisions were taken in that window, opposing parties may explore whether authority can properly be assumed. Again, this will not invalidate every act. But it adds a further dimension to arguments that were previously more contained.

Conclusion: Not dramatic — but not trivial

This is not a reform that will upend corporate litigation overnight. Most directors will verify. Most filings will proceed without difficulty. The significance lies elsewhere.

By attaching real consequences to non-verification and by seeking to strengthen the reliability of the register, the legislation alters the context in which authority and control are analysed.

In routine matters, that change will barely register. In shareholder disputes, fraud claims and insolvency proceedings, it is likely to surface — sometimes as a central issue, sometimes as an additional pressure point.

For those advising companies, and those litigating about them, identity verification is not simply about filing discipline. It is about who can credibly say they were entitled to act — and whether the public record supports that claim.