Directors Beware: The Court's Stringent Stance on Breaching Fiduciary Duties

24th April 2023

Aaron Mayers

Aaron Mayers, specialist commercial barrister at 3PB Barristers’ (3 Paper Buildings), has written on the stringent stance of the courts on cases involving a breach of fiduciary duties, with reference to the recent Court of Appeal decision in Recovery Partners GP Ltd v Rukhadze and others [2023] EWCA Civ 305.

The case in question involves a breach in fiduciary duty by the Defendants by appropriating a business opportunity from the Claimant. The breach stems from the employment of the Claimant by the family of a Georgian billionaire following his death to assist in recovering the assets of his estate. There was a subsequent falling out, with the Defendants (who were at one point under the employ of the Claimant) pursuing the opportunity alone.

In his article, Aaron explores the case of Recovery Partners GP Ltd v Rukhadze and others through both the original High Court decision and subsequent Court of Appeal case, which ultimately concluded with the Defendants unsuccessfully arguing that the temporal scope of the account for profits should be limited, and having to account for circa 75% of the profits they had made following their fiduciary breach. Aaron also highlights the key takeaways for fiduciaries, including the need to be aware of how robustly the courts will enforce the “stringent” rule, and the limited factors the court might take into account when making equitable allowances.

To read Aaron’s full article, please click here

Aaron Mayers is a specialist commercial and chancery barrister, with a particular focus on developing litigation strategy and providing commercially viable advice in complex and high-value commercial and trusts disputes.

To contact or instruct Aaron, please contact his clerks Patrick Robson, Patrick Steptoe, and David Fielder, or call 020 7583 8055.