UK: England and Wales: directors' duties and shadow directors

In Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638 (Ch), Mr Justice Lewison (as he then was) stated that the "indirect influence exerted by a paradigm shadow director who does not directly deal with or claim the right to deal directly with the company's assets will not usually, in my judgment, be enough to impose fiduciary duties upon him" (para. [1289]).

Today, in Vivendi SA Centenary Holdings III Ltd v Richards [2013] EWHC 3006 (Ch), a stronger position was taken by Mr Justice Newey in respect of the duties of shadow directors:

"... my own view is that Ultraframe understates the extent to which shadow directors owe fiduciary duties. It seems to me that a shadow director will typically owe such duties in relation at least to the directions or instructions that he gives to the de jure directors. More particularly, I consider that a shadow director will normally owe the duty of good faith (or loyalty) ... when giving such directions or instructions. A shadow director can, I think, reasonably be expected to act in the company's interests rather than his own separate interests when giving such directions and instructions". (para. [143]).