knowledge 14 May 2026 |

Legal Risks Facing Directors – A Review of Recent Case Law

1. Personal liability arising from breach of confidence

In Kieran Corrigan & Co Ltd v OneE Group Ltd¹ (October 2025), the UK High Court held a director personally liable for a breach of confidence, following confirmation in an earlier Court of Appeal decision that a director may be held personally liable for a breach of confidence whether or not the director knew that confidential information was being misused.

The claimant (“KCL”) had developed a tax-efficient structure in anticipation of a joint venture with the defendant, OneE Group, which would allow OneE to utilise certain R&D tax reliefs.  The parties entered into an NDA covering the structure, but the joint venture did not proceed. OneE later used the structure for another client, generating a multi-million-pound return. The UK High Court found two of OneE’s directors liable for misuse of KCL’s confidential information, with a third director found not liable due to the fact that he had not been involved in the development of the structure with KCL and did not know that confidential information had been used in its development.

The Court of Appeal reconsidered the third director’s liability, emphasising that there must be clear evidence of personal involvement to ground liability. Following the retrial in 2025 introducing such evidence, it was held that the third director had been in "actual receipt" of the confidential information, and that his actions went further than merely assisting the primary wrongdoer. He was therefore found personally and jointly liable for breach of confidence.

This decision confirms that once an obligation of confidence is imposed on a director by reason of his or her receipt of confidential information, he or she is under a personal duty not to misuse such information. That duty may be breached even where the director is not aware that they are using confidential information.

2. Director personally enjoined in proceedings against company

In Keith Duffy v MSCL Ltd² (May 2025), the Irish High Court enjoined a former director as a co-defendant to proceedings against the defendant company, which concerned misuse of Boyzone member Keith Duffy's image in advertising. The defendant contended that the former director, Mr Corcoran, was merely an employee with no role in the management or control of the company. The plaintiff alleged that the former director continued to act as a de facto director and questioned the validity of a CRO filing which had removed him from the role. The Court found that the threshold for joinder was low and that it retains a broad discretion in such decisions. It rejected the defendant's contention that Mr Corcoran lacked involvement in the company’s affairs. While there is a discretion to refuse joinder if the application is futile or vexatious, the Court held that the merits of the case would not be considered at this stage, stating: "if there is doubt, the defendant should be joined".

The Court also relied on Order 15, rule 13 of the Rules of the Superior Courts 1986, which allows a party to be joined where their presence is necessary for the effective adjudication of the case. In particular, the Court noted that issues regarding the accuracy of CRO filings, forged signatures, and failures to comply with court orders were capable of impacting the defendant's arguments regarding the corporate veil and the scope of delegated responsibility.

This judgment demonstrates that the corporate veil, while likely a substantive defence at trial, is not a barrier to joining a director in his personal capacity as a co-defendant. The Court emphasised its wide discretion and the low threshold to be satisfied when joining parties to proceedings.

3. Restriction for failing to act in the company’s best interests

In Downtul Limited [In Liquidation] v Companies Act 2014³ (June 2025), the Irish High Court confirmed that directors may be restricted for lawful actions taken pursuant to the Companies Act 2014 where those actions are not taken in the best interests of the company, particularly in respect of decisions made by directors acting in a dual role across various transacting group companies.

Downtul Ltd held a commercial lease for a property, which was occupied and operated as a Starbucks by another company of which the directors were also directors. No documented agreement formalised this arrangement. In addition, the company had not held a board meeting since 2017, failed to maintain proper accounting records, did not disclose material transactions in its financial statements, and ultimately became insolvent. The Court concluded that the directors' conduct had fallen short of the minimum standards of responsibility, resulting in an order of restriction against each director.

This decision highlights the importance of identifying and formalising clear and enforceable arrangements between group companies. It also serves as a reminder of the director's obligation to act in the best interests of each company for which they act. Notably, the Court commented on the number of directorships held by the directors (each holding between 130 and 170), observing that such a high number created a greater onus to formalise all decision-making in respect of each company whose affairs they directed.

4. Costs of creditor's winding up petition borne by directors

In Cresta Estates Ltd v MPB Developments Ltd⁴ (January 2025), the English High Court ordered directors to personally bear the costs of a creditor’s winding-up petition which they unreasonably defended in their own interests.

The Court identified two central questions: whether the directors were the "real" party to the litigation (i.e. seeking to benefit personally); and whether it was otherwise just to make the order. The Court rejected their position that they believed the company would remain solvent, finding that they had personally benefited to the tune of £240,000 by prolonging the defence and pursuing settlement terms favourable to themselves.

The Court held that their conduct "infected the conduct of the proceedings", rendering them personally liable for costs. This case clarifies that, while rare in practice, courts have the discretion to impose costs on non-parties to proceedings if they are a "real party to litigation" and to prevent injustice against creditors.

5. Personal liability for reckless trading, failure to keep adequate accounting records, and misfeasance

In Tuskar Property Holdings Ltd [In Liquidation] v Companies Act 2014⁵ (January 2026), the Irish High Court found three directors to be in breach of their duties and disqualified each of them in the context of the winding up of three companies.

The directors’ conduct ranged from fraud and fabrication of documents to reckless failure to attend to company business and diversion of company monies into personal accounts. The Court imposed unlimited personal liability on the most culpable director, withdrawing the benefit of limited liability entirely. The decision highlights the Court’s broad discretion to set disqualification periods under s.842 of the Companies Act 2014 and to impose unlimited personal liability where warranted.

Conclusion

The cases reviewed in this briefing underscore a judicial willingness—in both Ireland and the UK—to look beyond the corporate entity and hold directors personally accountable for their conduct. Whether through personal liability for breach of confidence, joinder to proceedings against the company, restriction for failures of corporate governance, costs orders for self-interested defence of petitions, or disqualification for reckless and fraudulent trading, the message from the courts is consistent: the protections afforded by incorporation will not shield directors who fail to discharge their duties with integrity and diligence.

Directors should ensure that their decision-making is properly documented, that conflicts of interest are managed transparently, and that the interests of each company they serve remain at the forefront of their actions.