Thursday, 14 March 2013

UK: England and Wales: sole director could not claim for company's breach of health and safety obligation

The Court of Appeal gave judgment today in Brumder v Motornet Service and Repairs Ltd & Anor [2013] EWCA Civ 195. The case concerned an an injury suffered by the sole director and shareholder of a company. The injury arose because of a breach by the company of its statutory obligation to maintain equipment in efficient working order (as required by regulation 5(1) of the Provision and Use of Work Equipment Regulations 1998 SI 1998 No. 2306). At issue was whether the director could bring a claim against the company where his breach of duty under section 174 of the Companies Act 2006 to exercise reasonable care had prevented the company from meeting its statutory obligation. The court unanimously held that he could not. Lord Justice Longmore, agreeing with the lead judgment delivered by Lord Justice Beatson, stated (para. [62]):

The Provision and Use of Work Equipment Regulations 1998 impose an absolute obligation that machinery in the workplace is to be adequately maintained. I understand the policy behind the imposition of the absolute obligation primarily to be, as Beatson LJ has explained, to protect the weaker party in the employer/employee relationship but also to encourage the highest standards of compliance on the part of the directors and others responsible for the performance of the company's absolute obligation. If the very director responsible for performing the company's obligation can himself sue the company for breach of that obligation, that policy will be significantly undermined."

Update (18 March 2013) - the ICLR has provided a summary of the decision: see here.

No comments: