About Hannah Sharp Hannah Sharp is a partner in Rosling King’s Dispute Resolution Group specialising in financial services disputes, fraud and commercial litigation, both domestic and crossborder. Hannah has significant experience of acting for banks (investment and retail) and other financial institutions, corporates and ultra-high-net-worth individuals on a broad range of complex disputes. About Rosling King LLP Rosling King LLP is a London-based law firm specialising in serving the needs of financial institutions, corporates and individuals. Contact Hannah Sharp Partner Rosling King LLP 55 Ludgate Hill, London EC4M 7JW Tel: +44 02072 468000 E: hannah.sharp@rkllp.com www.rkllp.com be kept “within reasonable bounds” in order to maintain the concept of limited liability of companies. The court decided that, as there was no conscious decision regarding a warning on currency risk, there could not have been a “common design” between Mr Ioannou and APP – although the fact that there were no warnings renders the company liable as the company had a relationship of assumed liability with the claimants. It was further considered whether the manner of marketing of the properties, which included the failure to advise on currency risks, could be said to be a common design, but the court held that this would lead to “an unduly wide view of the personal liability of directors and senior managers in such cases”. Conclusion The Court of Appeal therefore held that the claimants had failed to establish liability on the part of Mr Ioannou at the first stage, since the conditions in Fish & Fish were not met. The second stage was accordingly not considered, but it was noted that the “constitutional role” defence is intended to be of narrow application, and that it would be an unacceptable anomaly if: (1) a senior manager incurred personal liability as an accessory, but a director did not; or (2) personal liability depended on a formality (e.g. board resolution or power of attorney) authorising the conduct in question. The Court of Appeal’s decision provides useful guidance on the scope of directors’ accessory liability in tort. However, the Court of Appeal made clear that the assessment is highly factsensitive and therefore liability must be decided on a case-by-case basis. SPECIAL FEATURE 51
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