When a litigation funder finances a claimant to take proceedings, which are unsuccessful, and the claimant is not in a position to pay the defendant’s costs, it is possible for the defendant to apply for a costs order against the funder. In general terms, a costs order is likely to be made against the funder […]
Author Archive: paston2
Directors personally liable for breaching employment contracts
The creation of the limited liability company in the 19th century has been described by some as the most important invention of the industrial age. But in recent times the protection that limited liability gives to directors has been eroded as the Courts discover new exceptions and Parliament is lobbied to change the law to […]
Are directors liable to repay dividends when the accounts they relied on are wrong?
Having previously been to the Supreme Court, the case of Burnden Holdings v Fielding has now gone to trial and created even more new law. At the heart of the case was the question of whether the directors, Mr & Mrs Fielding, were personally liable for breach of duty in causing the company to declare […]
You don’t need a board meeting to declare an interim dividend
If you are a company director searching on Google how to declare an interim dividend, the answers you get would suggest that a board meeting is required. After all Part 23 of the Companies Act 2006 requires the directors to consider the relevant accounts and satisfy themselves that the company has sufficient distributable profits before […]
Duties of a dissenting director
This is an area of law & practice that is shrouded in mystery. In the context of a company in financial distress, most people tend to think that if a director disagrees with a course of action being taken by other directors, he/she should resign. We’ve never agreed with this, but in practice most directors […]
Can a creditor sue a company that has filed a Notice of Intention to Appoint an Administrator?
Administration is a formal procedure in which an insolvency practitioner is appointed to manage the company’s affairs in the interest of creditors with the goal of restructuring the business or realising its assets. Administration is commonly used by companies to buy a breathing space to try to rescue their businesses. There are several routes into […]
Court of Appeal limits claims against directors
In a much anticipated and long-awaited decision, the Court of Appeal in BTI 2014 LLC v Sequana SA has cast its magnifying glass over breach of duty claims under section 172 Companies Act 2006 and limited the circumstances in which claims can be brought against directors. The case concerned the declaration of a dividend of […]
Liability of auditors for negligent audit – how times change!
Back in 2009, on the last day that the House of Lords delivered judgments, it was decided on a 3:2 majority that Moore Stephens were not liable for the negligent audit of Stone & Rolls Ltd. Moore Stephens failed to spot that the sole director had defrauded the company. The Court said that the Company […]
A Guide to the Debt Recovery Protocol
Last October, the Pre-Action Protocol for Debt Claims (the “Protocol”) was introduced by the Government. The Protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (which can also include a sole trader). The business will be referred to as the “creditor” and the individual will […]
Bankruptcy estates can now be compensated for loss caused by breaches of trust
In a recent void disposition case concerning a Trustee in Bankruptcy’s entitlement to claim compensation from the recipient for loss arising out of a breach of trust, the Court of Appeal (Ahmed and others v Ingram and another [2018] EWCA Civ 519) has upheld the decision of the court below. The latter determined in the […]
Carillion – recovering money for creditors
Parliament has decided that Carillion’s board of directors were culpable for its failure. MP’s are calling for the disqualification of the board from acting as directors in the future. Read the full article on the BBC News website. The directors of Carillion are accused of driving the company off a cliff in a dash for […]
Do you run the risk of trading under a prohibited name after liquidation?
If you have acted as a director of a company that goes into insolvent liquidation (the “liquidated company”) at any time in the 12 months prior to the liquidation, then you will need to be aware of Section 216 of the Insolvency Act 1986. That section prohibits you from acting as a director of a […]
Carillion – a fair trial for the directors?
Parliament has decided that Carillion’s board of directors were culpable for its failure. MP’s are calling for the disqualification of the board from acting as directors in the future – Judge, Jury and Executioner. Read the full article on the BBC News website. The directors of Carillion are accused of driving the company off […]
The unsatisfactory status of EU pensions
It has long been the case that most pension schemes within the jurisdiction of England & Wales do not form part of the bankrupt’s estate and are therefore not available for distribution to creditors. This is as a result of the Welfare Reform and Pensions Act, passed in 1998 (“the Act”), which provided that any […]