Ali Tabari successfully defended two former directors of the Hospital Medical Group in a £35m claim brought after the collapse of a high profile healthcare provider which had been involved in the PIP breast implants scandal, and which had undergone a major complex restructuring exercise. The claim was brought on multiple grounds: that the directors had acted in breach of duty, that they were part of an unlawful means conspiracy with the remaining defendants, and that they effected an unlawful return of capital by putting into effect an informal winding up of the company. All claims were dismissed in their entirety by Mr Justice Richard Smith after a trial in the Rolls Building lasting nearly a month, the judgment running to 176 pages: view the judgment here.
The claimant was a litigation funder represented by two Silks and two juniors; the claim was also brought against (i) Barclays Bank, the company’s banker, which was represented by Silk and junior, (ii) The Wilkes Partnership, the company’s solicitors, also represented by Silk and junior, and (iii) an alleged de facto director, represented by senior junior Counsel.
The judgment raises some interesting legal issues concerning the scope of directors’ duties during a group restructure, and how contingent liabilities are to be treated for the purposes of claims in breach of duty. It will also come as considerable relief to directors who take commercially-sound decisions based on professional advice, in the knowledge that they will not be held liable for a negative outcome that they could not have predicted; the same applies to their funders and professional advisers.
Ali Tabari was instructed by Stephen Rome and Georgia Morris of Thursfields Solicitors.
Written by Arron Snipe