Court of Appeal rules that directors who fraudulently misappropriated client money were liable for the cost of repaying it, but not for the company’s subsequent trading losses.
In a decision clarifying the circumstances in which companies can recover losses from dishonest directors, the Court of Appeal has ruled that two directors who fraudulently misappropriated client money were not legally responsible for the company’s subsequent trading losses, drawing an important distinction between losses caused by ordinary trading and those resulting directly from their wrongdoing.
Handing down the judgment in London on Friday (31 July), Lord Justice Snowden, sitting with Lord Justice Bean and Lord Justice Peter Jackson, allowed an…