14. Directors’ liabilities for breach of duty

Abstract

This chapter focuses on the extent of a director’s civil liability for breach of fiduciary duty and the liability of third parties involved in some way in that breach of duty. One of the most important issues is the extent of a director’s liability to account. Liability can range from accounting for secret profits to claims for equitable compensation and from personal to proprietary claims. Often, a claim will be affected by limitation issues. It may be complicated by the involvement of third party accessories. Mitigation through reliance on indemnity provisions, insurance and by applying to the court for relief is also considered. The discussion covers: breach of fiduciary duty, liability of third parties, claims for negligence, and managing potential liabilities.