Government abandons disqualification claim against Carillion NEDs
13th October 2023
The collapse of Carillion plc in January 2018 sparked much political heat, but less light. The Secretary of State for Business and Trade pursued directors disqualification proceedings under s6 Company Directors Disqualification Act 1986 against 3 executive directors and 5 non-executive directors (NEDs). Five Erskine Chambers barristers comprised two of the four defence teams. Andrew Thompson KC, Andrew Blake and Philip Morrison acted for the NEDs, instructed by Herbert Smith Freehills (John Whiteoak and Natasha Johnson). The executives ultimately gave undertakings, but trial of the claim against the NEDs was due to start before Joanna Smith J on 16 October 2023. However, on 13 October the Secretary of State discontinued.
This represents a major triumph for the entire defence team, vindicating a case strategy implemented since the first CMC in November 2021, and culminating in the collapse of the Claimant’s case. That case was legally flawed, based primarily on an erroneous contention that directors owe a strict duty to know the true financial position of the company. Interesting subsidiary questions as to the true role and duties of non-executive directors, particularly in listed companies, will remain unanswered, although the defence team are available to provide their insights!