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Re Lexi Holdings Plc

[2007] EWHC 2652 (Briggs J) and [2009] EWCA Civ 117

Court: Court of Appeal
Philip Marshall QC, Ruth den Besten

Held that a company director who knows of some instances of misappropriation and does nothing to prevent it will be in breach of his common law duty of care and liable to compensate the company for the entire loss (including losses from other misappropriations which he was not party to or knowledgeable about) because he is aware of a practice of misappropriation and it results from his inactivity. The decision also gave guidance on the importance of establishing causation in cases of non-feasance (i.e. negligent omission) as opposed to misfeasance (negligent action).


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