It is regrettably not unheard of for directors to flout their duties and help themselves to company money to which they are not entitled. However, one High Court case showed that professionally managed litigation can be a swift means of catching up with miscreants and recovering defined monetary losses.

A financial services company had launched proceedings against a former director, alleging wholesale breaches of his fiduciary duties. Amongst other things, he was accused of wrongfully extracting commissions from clients, misappropriating company funds and submitting false business expenses claims.

The director put in a detailed defence to the company's claim. However, that defence was later automatically struck out due to his failure to comply with case management directions. The company was therefore granted a default judgment against him for a sum in excess of £105,000.

That award represented losses that could be precisely quantified in money terms. The Court found that placing a value on other elements of the company's claim –including an allegation that the director had secretly diverted away its business for his own benefit – would require a full hearing.

The courts can come down hard when there is a failure to comply with case directions. If you are engaged in a company dispute, we can provide expert legal advice as well as ensuring careful management of the case as regards procedures and requirements of the court.

 

 

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