Directors and Officers

An increased focus on governance and individual accountability has led to directors and officers coming under greater scrutiny than ever before. As a result, the number of claims against directors has increased, as has the need for directors to take specialist advice on their duties and on specific compliance issues.

Strength and depth of our experience

We have an experienced team of lawyers who specialise in advising directors and officers at every stage of a company’s life, from issues arising on incorporation, directors’ duties and governance/compliance, through to employment and regulatory proceedings, shareholder disputes, reputation and crisis management and claims arising from insolvency events. We also have expertise advising individuals assigned specialist roles such as Head of Internal Audit, SIDs, NEDs, MLROs.

Investigations and regulatory enforcement against directors and officers

Our experience of dealing with regulatory and criminal investigations in particular means that we are able to advise directors and officers in dealing with investigations by the regulators or other agencies including the Serious Fraud Office (SFO), HM Revenue and Customs (HMRC), the Health and Safety Executive (HSE), National Crime Agency (NCA), Financial Conduct Authority (FCA), Financial Reporting Council (FRC), The Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA).

We also regularly advise on the Senior Managers and Certification Regime (SMCR), on immigration enforcement action, on data protection issues including ICO/GDPR enforcement, on cyber crime issues and on directors’ disqualification proceedings.

More specific examples of the advice we provide and recent work are set out below.

directors' duties and governance

Directors' duties
Conflict issues
Issues regarding powers/authority/execution of document
Policy documentation, including regarding anti-bribery and corruption, and anti-money laundering

COMPLIANCE & REGULATORY ENFORCEMENT

Recent work:

Advising directors of their responsibilities under the Senior Managers and Certification regime
Representing directors in prosecutions for Health and Safety offences under the Health and Safety at Work etc. Act 1974
Representing directors in prosecutions for licensing offences under the Licensing Act 2003
Advising a board of directors on their responsibilities to safeguard children and vulnerable people on its premises
Advising directors on their responsibilities to make provision for disabled persons under the Equality Act 2010 (and associated legislation)
Representing a director in a criminal prosecution for fire safety offences under the Regulatory Reform (Fire Safety) Order 2005
Advising directors on general fire precautions, maintenance, risk assessments and fire safety strategy.
Advising (doctor) directors of start-up health and well being clinics on their regulatory responsibilities
Representing (ACCA and ICAEW member) directors on regulatory issues surrounding governance and regulatory compliance
Advising (solicitor) directors on their regulatory and compliance obligations to the Solicitors Regulation Authority (SRA)
Advising (surveyor) directors on their regulatory and compliance obligations to the Royal Institute of Chartered Surveyors (RICS)

CLAIMS BY/AGAINST COMPANIES AND DIRECTORS

Our experts can advise on:

Disputes between directors, shareholders and partners
Breach of duty/misfeasance claims
Unfair prejudice claims
Derivative actions
Injunctive relief
Breach of warranty claims
Liabilities of shadow directors
Corporate and personal insolvency
Liabilities of directors arising from a corporate insolvency
Directors disqualification proceedings
Professional negligence
Reputation and crisis management/Defamation

We have experience and expertise in acting for both claimants and defendants in these types of claims.

Recent work:

Acting for shareholder/directors bringing and defending unfair prejudice petitions
Advising on an injunction to prevent parties from taking over the Board
Advising on a claim brought by a purported shareholder for rectification of the Register of Members
Advising director/shareholders on the sale, or purchase, of shares/the business to/from fellow director/shareholders
Bringing and defending claims against directors for breaches of duty e.g. diverting contracts to other companies, using company monies for their own purpose, causing the company to enter into contracts with connected parties, receiving commission from connected companies
Advising directors in respect of their purchase of a company from the liquidators

InvestigATIONS and reputation management advice

In particular:

Internal investigations, including into:
- Suspected criminal or regulatory misconduct of any kind
- Business Crime and Human Rights and Modern Slavery Act compliance
- #MeToo issues
Dawn raids & crisis management including search and seizure of company and residential premises
Police station advice and representation for directors, NEDs, officers and employees
Advice on criminal investigations, both domestic and international, including:
- Financial crime
- Cybercrime
- Cartel investigations and prosecutions
- Sanctions and export controls
- Corporate manslaughter and health and safety offences
- Environmental crime
Advice on criminal liability for corporates and directors
Advice on deferred prosecution agreements
Representation of company or individuals in any prosecution

Employment advice

Contracts including non-executive director (NED) appointment letters
Directors’ indemnities and directors’ and officers’ liability insurance
Personal liabilities including whistleblowing, discrimination and health and safety
Duties and liabilities under the Senior Managers & Certification Regime
Remuneration
Resignations and removals
Termination of employment

Immigration issues

Immigration (Home Office) enforcement advice
Advising on key criteria in order to become an Authorising Officer for a Tier 2 employer sponsor licence and on-going responsibilities for Authorising Officers
Advising on how to maintain an A rated sponsor licence along with on-going Tier 2 sponsor compliance
Carrying out compliance audits as part of a due diligence process
Advising on key obligations from an immigration perspective where a merger, de-merger, TUPE or change in corporate structure is concerned

Recent work:

Advising on an acquisition worth 5 billion Euros that involves the creation of a wholly owned subsidiary in the UK, to include advising one of the newly appointment Directors on his duties as the Authorising Officer for the purposes of a Tier 2 sponsor licence application. Further, to include working with the Authorising Officer to submit the application to the Home Office and advising on on-going compliance matters
Advising on a TUPE transfer following an asset sale that involved Tier 2 non EU national sponsored employees

data protection and representation at inquiries, inquests and select committees

Compliance with data protection law
ICO enforcement action in relation to data protection and GDPR breaches
Appearing at inquests, public inquiries and select committees

Read more about our data protection services and Public Law services

Modern slavery, business and human rights

Internal investigations on behalf of corporate clients, including advice to companies caught up in criminal and regulatory investigations
Acting in judicial review litigation, involving a broad range of human rights issues including Human Rights Act damages claims
Advising on compliance with Modern Slavery legislation, best practice and emerging norms
Advice on slavery and human trafficking statements

Divorce and Family issues

Recent work:

Acting for directors/shareholders in financial proceedings upon divorce
Acting for the spouses of directors/shareholders in financial proceedings upon divorce
Representing in divorce proceedings a wife who jointly owned a company with her husband
Advising a director/shareholder husband in respect of a postnuptial agreement that dealt with the company that he jointly owned with his wife
Advising director/shareholders who intend to get married, or their partners, in respect of prenuptial agreements.

Read more about our Family and Divorce services

Complex and stressful situations

We recognise that when you are a company director or officer, taking legal advice in some situations may be personally difficult and stressful. Our specialist team is highly experienced in helping guide you through complex and high pressure situations, particularly where reputation management issues arise in high profile disputes. We also work with specialist D&O insurers who provide cover in a wide range of circumstances.

Further information for directors and officers

If you would like more information or require advice in relation to any of the above areas, please contact a member of our team.

+44 (0)20 7814 1200

Contact the team

Melinka Berridge

Regulatory

Partner

Email Melinka

James Fulforth

Corporate and Commercial

Partner and Head of Department

Email James

Nicola Finnerty

Criminal Litigation

White Collar and Financial Crime

Financial Services

Partner

Alun Milford

Criminal Litigation

Partner

Michael Mulligan

Dispute Resolution

Partner

Fiona Simpson (Français)

Dispute Resolution

Partner

Fiona Simpson

Dispute Resolution

Partner

Adrian Crawford

Employment

Executives

Financial Services

Partner

Nick Ralph

Employment

Partner

Rachel Freeman (Français)

Family and Divorce

Partner

Rachel Freeman

Family and Divorce

Partner

Ilda de Sousa

Immigration

Partner

Emily Carter

Public Law

GDPR and Data Protection

Public Inquiries

Partner

Hannah Eales

Regulatory

Partner

Julie Matheson

Regulatory

Partner

Julie Norris

Regulatory

Partner

Luke Gregory

Corporate and Commercial

Associate

View key contacts

Request a copy of our fraud prevention toolkit

Latest blogs & news

BEIS White Paper on Audit Reform: Will Kwarteng's reforms really unchain entrepreneurs?

In 2012, as a recently elected MP, Kwasi Kwarteng co-authored “Britannia Unchained: Global Lessons for Growth and Properity”, a political pamphlet which championed risk-taking and innovation in the UK economy, and which ever since has led some to label him a fervent Brexiteer. Appointed as the Business Secretary in January 2021, only a few months later his department (BEIS) published one of the longest and most ambitious government White Papers in recent years.

Is a personality clash in the Boardroom a fair reason for dismissal?

A recent case has highlighted a trend that that we have seen over recent years, with Employment Tribunals finding that the dismissal of a senior executive can be fair where there has been a breakdown in relations amongst a management team and one director / executive is considered to be more at fault (Moore v Phoenix Product Development Ltd EAT/0070/20). Also, the procedural requirements for such dismissals may be more limited, in this case, the fact that no right of appeal was offered did not render the dismissal unfair.

Ignorance is bliss? Not for directors!

In the recent case of TMG Brokers Ltd (In Liquidation) (also known as: Baker v Staines) the High Court held a director of a company to be jointly and severally liable for payments made by his co-director out of the company’s bank account which were made without proper authority and amounted to disguised distributions of capital. The fact that he had placed trust in the other director for the company's financial affairs did not excuse him from performing his duties.

FCA Moves to Deregulate SPACs

Following the release of the Hill Report at the start of last month, the FCA has announced that it is going to open a consultation into changing the Listing Rules and connected guidance with a view to encouraging the listing of Special Purpose Acquisition Vehicles (SPACs).

ICSA’s Report on Board Evaluations – A Brief Summary

Following a request by the Department of Business, Energy and Industrial Strategy (“BEIS”) ICSA has prepared a report assessing the effectiveness of the independent board evaluation process introduced in the 2018 update of the UK Corporate Governance Code (the “UK Code”).

One hand in the cookie jar: Fraud and directors’ duties in insolvency

What happens when a director commits fraud by misappropriating company assets? Or what of the director who continues trading knowing that the company has no realistic prospect of paying its debts as and when they fall due? To whom does a director owe duties at that point and what recourse is there against that director? This article explores these questions.

Money, money, money: what are directors’ duties in respect of the company’s bank account?

Disputes between directors often arise because of, and/or result in, disputes about company money. Directors need to be alert to how they are required to act, particularly in times of conflict.

Can a De Facto Director be disqualified as a Director?

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.

Fit and proper person requirements for directors in the health and care sector – what does this mean and what are service providers required to do?

All providers registered with the Care Quality Commission (“CQC) must assure themselves that all directors who are responsible for delivering care to service users are fit and proper – in other words, they must be able to diligently carry out their responsibility to ensure the quality and safety of care. This forms part of the providers’ duty to ensure the service is well-led, which is one of the focus points during an inspection. Not only does the CQC monitor compliance at the point of registration, but it is an on-going duty and can lead to enforcement action where it is not met.

Directors’ communications with their solicitors: perhaps not as privileged as you think (Part 2)

In the recent case of Barrowfen Properties Ltd v (1) Girish Dahyabhai Patel (2) Stevens & Bolton LLP (3) Barrowfen Properties II [2020] EWHC 2536 (Ch), the High Court extended the iniquity exception to breaches of a director’s statutory duties.

Insolvency Practitioners: the regulator’s reach is wide when it comes to integrity

It goes without saying that Insolvency Practitioners must behave honestly and with integrity in all their professional dealings. IPs must handle money and assets in a way which justifies the trust placed in them, but some professionals don’t realise that the way they behave on a Saturday night may be just as relevant to their ability to continue in their chosen profession as the way they behave on a Monday morning.

Coronavirus business loan scheme fraud

In response to the coronavirus (“COVID-19”) pandemic, the government introduced a number of loan schemes in order to assist businesses struggling financially. Recent reports suggest that these schemes, as outlined below, have become a target for fraudulent loan applications, by both genuine businesses and also organised criminal enterprises. This blog briefly examines the various loan schemes in place and the criminal offences which are likely to be the focus of investigating authorities in the coming months.

The driving force fallacy

Court of Appeal overturns injunction in favour of son who sought to restrain his family from participating in the management of their caravan park business - Loveridge –v- Loveridge [2020] EWCA Civ 1104.

Directors disqualified following history of health and safety and waste law breaches

Brother and sister Mark and Rachel Penfold were directors of a waste management company. In February 2016 an employee of the business suffered a serious injury when his arm was caught in a conveyer he was operating whilst at work. The Health and Safety Executive prosecuted the company and both individuals under the Provision and Use of Work Equipment Regulations 1998 (PUWER).

Director of an insolvent company? Know your exposure…

We live in uncertain and financially very troubling times. The coronavirus pandemic and the unprecedented measures put in place to tackle it have caused severe disruption to businesses. Big names such as Harveys, TM Lewin, Intu and the owners of Café Rouge and Bella Italia all went into administration at the beginning of the month. They will not be the last.

Stretching the limits of Directors’ personal liability for torts?

It is a sad reality that the Covid-19 Pandemic is likely to lead to a spike in the number of companies being put into insolvency. This has the potential to leave parties with claims against those companies with a reduced prospect of full recovery, even if their claims are strong. As a result, claimants may look for alternative targets, including ways in which they could sue directors personally.

Company Succession Planning: Death of a sole director – now what?

Company succession planning is critical to ensure that a company can continue to run in the unfortunate event that a director (or shareholder) dies. If there are other surviving directors, they are able to step in and run the company, but what happens when a sole company director dies?

The impact of the coronavirus crisis on business valuations in divorce settlements

The impact of COVID-19 is being felt in many different ways. For those going through a separation or divorce, the pandemic has added a layer of uncertainty and stress to an already difficult process. This is particularly so for those who own a business (or whose spouse does), where the value of their business may have been affected and they are concerned with the impact on a financial settlement. In this blog, we look at the complexities of valuing businesses in divorce proceedings at this unprecedented time and provide some practical considerations.

Liquidation and Fiduciary Duties: No Rest for (the Wicked?) Directors

In Hunt (as Liquidator of System Building Services Group Ltd) v Michie & Ors [2020] EWHC 54 (Ch), ICC Judge Barber has confirmed that directors of insolvent companies remain subject to fiduciary duties, even after those companies enter into an insolvency procedure.

Compensation orders against company directors: a new way around Limited Liability?

The case of the Secretary of State for Business, Energy and Industrial Strategy v Kevin William Eagling [2019] EWHC 2806 (Ch) was the first brought by the Secretary of State under a regime in the Company Directors Disqualification Act 1986 providing for compensation orders. The court found in favour of the Secretary of State and made its first ever compensation order under the regime requiring a company director to provide compensation.