The vanishing exception?

© Copyright LexisNexis 2025. All Rights Reserved.

04 December 2008 / Victor Joffe KC , James Mather

Issue: 7348 / Categories: Features , Commercial

printer

mail-detail

Part 2: Victor Joffe QC & James Mather continue their refl ections on controversial cases on ability to pay

In Giles v Rhind [2003] 1 BCLC 1, [2003] All ER (D) 340 (Oct) the Court of Appeal held that there was an exception to the no reflective loss principle where the defendant had by his own wrongdoing so destroyed or disabled the company that it was unable to pursue its claim against him.

The facts in Giles v Rhind

In breach of his service agreement with the company SHF, D set up a competing company, to which he induced SHF’s major customer to transfer its business. SHF issued proceedings against D, but went into administrative receivership, and was forced to discontinue because it had no funds to provide the security for costs which it was ordered to pay on D’s application.

The claimant, a shareholder in SHF, then brought proceedings against D claiming damages for breach of a shareholders’ agreement to which they were both party. Th e claims included sums

If you are not a subscriber, subscribe now to read this content

If you are already a subscriber sign in

...or Register for two weeks' free access to subscriber content

The vanishing exception?

© Copyright LexisNexis 2025. All Rights Reserved.

Part 2: Victor Joffe QC & James Mather continue their refl ections on controversial cases on ability to pay

In Giles v Rhind [2003] 1 BCLC 1, [2003] All ER (D) 340 (Oct) the Court of Appeal held that there was an exception to the no reflective loss principle where the defendant had by his own wrongdoing so destroyed or disabled the company that it was unable to pursue its claim against him.

The facts in Giles v Rhind

In breach of his service agreement with the company SHF, D set up a competing company, to which he induced SHF’s major customer to transfer its business. SHF issued proceedings against D, but went into administrative receivership, and was forced to discontinue because it had no funds to provide the security for costs which it was ordered to pay on D’s application.

The claimant, a shareholder in SHF, then brought proceedings against D claiming damages for breach of a shareholders’ agreement to which they were both party. Th e claims included sums

If you are not a subscriber, subscribe now to read this content

If you are already a subscriber sign in

...or Register for two weeks' free access to subscriber content

SourceURL:

Links:

E-newsletter Sign-Up

MOVERS & SHAKERS

DWF—19 appointments

DWF—19 appointments

Belfast team bolstered by three senior hires and 16 further appointments

Cadwalader—Andro Atlaga

Cadwalader—Andro Atlaga

Firm strengthens leveraged finance team with London partner hire

Knights—Ella Dodgson & Rebecca Laffan

Knights—Ella Dodgson & Rebecca Laffan

Double hire marks launch of family team in Leeds

NEWS

NLJ this week: Traders’ convictions quashed in Libor shock

The Supreme Court issued a landmark judgment in July that overturned the convictions of Tom Hayes and Carlo Palombo, once poster boys of the Libor and Euribor scandal. In NLJ this week, Neil Swift of Peters & Peters considers what the ruling means for financial law enforcement

NLJ this week: Pro bono power without the red tape

Bea Rossetto of the National Pro Bono Centre makes the case for ‘General Practice Pro Bono’—using core legal skills to deliver life-changing support, without the need for niche expertise—in this week's NLJ

NLJ this week: DNA evidence—justice on ice?

In this week's NLJ, Steven Ball of Red Lion Chambers unpacks how advances in forensic science finally unmasked Ryland Headley, jailed in 2025 for the 1967 rape and murder of 75-year-old Louisa Dunne. Preserved swabs and palm prints lay dormant for decades until DNA-17 profiling produced a billion-to-one match

NLJ this week: Small firms call for tech clarity as AI looms

Small law firms want to embrace technology but feel lost in a maze of jargon, costs and compliance fears, writes Aisling O’Connell of the Solicitors Regulation Authority in this week's NLJ

NLJ this week: Fraud claims climb as courts brace for AI threats

Charlie Mercer and Astrid Gillam of Stewarts crunch the numbers on civil fraud claims in the English courts, in this week's NLJ. New data shows civil fraud claims rising steadily since 2014, with the King’s Bench Division overtaking the Commercial Court as the forum of choice for lower-value disputes

back-to-top-scroll