Director Disputes

At Kuits we understand that the relationships between shareholders, directors and partners are vital to the success of your business. Disagreements are relatively commonplace, resulting from a variety of different reasons, and can have a major impact on the company and its members. Kuits’ Litigation team have the expertise to advise both corporate and individual parties in dealing with these types of disputes, many of which can bring with them a whole host of complex legal issues.

Our litigation lawyers have a wealth of experience across multiple disciplines, working wherever possible with our corporate, employment and commercial teams to find a collaborative resolution with the aim of achieving a timely and efficient resolution for your business, whether that be through alternative dispute resolution (ADR) methods, including mediation, or before or after proceedings have been issued.

Disputes amongst directors of a company are unfortunately very common and can arise for a variety of reasons, including:

• Disagreements over the control and management of the company
• Breach of duties
• Disagreements over the direction of the business
• Performance issues or personality clashes
• Where the parties wish to go their separate ways

These disputes have the potential to paralyse a company and so it is of vital importance to seek advice at the earliest possible stage to reach the most cost-effective and commercially efficient route to a resolution.

Directors have many duties in relation to a company, some developed through common law and some set out by statute. Sections 170-177 of the Companies Act 2006 identifies the general duties of directors as follows:

• to exercise reasonable care, skill and diligence
• to act within powers
• to avoid conflicts of interest
• to promote the success of the company
• to exercise independent judgment
• to not accept benefits from third parties
• to declare any interest in a proposed transaction

If a director breaches one or more of these duties, then the company can take legal action against them. It is also not uncommon for the board of directors to have a difference of opinion on the management or strategy of the company, which, if not resolved at an early stage, can create tensions leading to a dispute.

There are various legal options available to you when a dispute amongst directors arises. Kuits’ commercial litigation team has a wealth of experience advising parties, both corporate and individual, on various forms of director disputes. We will work closely with you from the outset to deliver the most desirable outcome for you.