Expert witness: Directors’ breaches & consequences

• Examples of breaches and their consequences.
• Forensic accountants’ role.

Shareholder dissatisfaction at company performance in the UK often focuses on directors’ responsibilities. The Companies Act 2006 codified certain general duties such as the duty to promote the interests of the company and directors’ obligations have also been refined over the years by case law. Certain legislative provisions affecting directors extend to ‘shadow directors’, ie persons on whose instructions the directors of a company are accustomed to act.

This article provides examples of directors’ breaches and their consequences and considers how forensic accountants can assist lawyers in actions arising from alleged breaches of directors’ responsibilities.

Forensic accountants’ role

Forensic accountants may become involved in showing that specific breaches of duty occurred, in putting forward defences to alleged breaches and in the computation of the financial consequences of a breach.

In relation to the financial consequences of a breach of duty,