Economic torts shred the corporate veil

26 October 2018

Palmer Birch Partnership and Michael Lloyd and Christopher Lloyd Evidence [2018] EWHC 2318 (TCC)

A recent dispute highlights the benefit of adopting alternative enforcement routes against company directors. In this case, the defendant company entered liquidation with unsecured debts in excess of £11m and realisable assets of just £115k. The Claimants issued proceedings against the directors personally in tort rather than relying on potential remedies available in the Companies Act or Insolvency Act. In finding that an unlawful means conspiracy had been established, HHJ Russen QC commented, that the standard corporate veil protection available to the directors "had become largely shredded… during the life of the contract" by their actions. The success in this case demonstrates the benefit of engaging a lateral approach to litigation recovery and similar enforcement options are available to claimants in Guernsey.

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