This blog examines some of the issues which arise from giving incorrect professional advice, or failing to give advice, and sets out some practical tips to identify when professional negligence claims may arise.
It is well known that directors owe duties to the company of which they are a director and, in certain circumstances, its shareholders, creditors and employees. Many people believe that if you have not been formally appointed as a director, i.e. you do not appear on Companies House records as a director, you will not owe the usual directors’ duties and, therefore, cannot be in breach of such duties or subject to sanctions for breach.
For many people, the first encounter with the words ‘subject to contract’ is probably when buying or selling a house. In that context, you may notice these words on all the correspondence from the estate agent and between solicitors until the contracts for the sale of the property are formally exchanged.
In the recent case of Barrowfen Properties Ltd v (1) Girish Dahyabhai Patel (2) Stevens & Bolton LLP (3) Barrowfen Properties II  EWHC 2536 (Ch), the High Court extended the iniquity exception to breaches of a director’s statutory duties.