Monday 15 July 2013

UK: England and Wales: High Court decides that managing director did not breach duty to exercise reasonable care, skill and diligence

Last Friday judgment was given by Mr Robin Knowles CBE QC (sitting as a deputy judge of the High Court) in ARB International Ltd. v Baillie [2013] EWHC 2060 (Comm). The case concerned a claim brought by a company (a Lloyd's insurance and reinsurance broker) against its former managing director in which it was claimed that he had breached several duties including section 174 ("Duty to exercise reasonable care, skill and diligence") of the Companies Act 2006. The claim failed, the deputy judge noting that the director "... had a sufficient knowledge and understanding of the company's business to enable him to discharge his duties as its Managing Director, and in respect of compliance. That does not mean that he knew all there was to know, including especially about points of insurance and reinsurance law and practice where the views and experience of others in the market differ. But he knew enough to do his job and, so far as material to this case, he had the experience to know when to take a view or make a business judgment" (para. [48]).

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