England and Wales: Directors' duties and the Re Duomatic principle

Lexi Holdings plc v Luqman [2007] EWHC 2652 (Ch) concerned an application for summary judgment, but nevertheless contains several important points concerning directors’ duties and the Re Duomatic principle. The trial judge:

(a) held the Re Duomatic principle does not apply where the company is insolvent

(b) declined to answer whether Re Duomatic could be invoked in respect of the approval of a beneficial rather than legal owner of shares

(c) stated that it was a firmly established legal principle that “no company director may simply leave the management of the company’s affairs to his or her colleagues, or to other delegates, without committing a breach of duty” (para. [219]).