When a director sustained an injury at work, he sought compensation from his company. He claimed that it had not fulfilled its duty to comply with health and safety law.
The claim, however, had a twist. The company was a ‘one man band’ and the director was the sole director and shareholder of the company. Accordingly, the claimant was the only person who could act on behalf of the company to mount a defence to the claim.
At the first hearing, the company was found to have failed to comply with the relevant health and safety regulations. However, the claimant was the person responsible for the breach. Accordingly, to the extent that damages against the company would be awarded, they would be reduced by 100 per cent as a result of his contributory negligence.
Following an appeal, the Court of Appeal concluded that the decision to reduce the damages payable by 100 per cent for contributory negligence was incorrect in principle. Once the breach of the regulations and the fact that the breach had caused the accident had been clearly established, the employer had a good defence – that the employee responsible was to blame. If the company was unable to demonstrate this, that defence would fail.
However, where the employee was a sole director, the situation was different. The director could not argue against himself in that way. If he was ultimately responsible for the conduct of the company, he could not claim that the company had failed to prove that it had done all it could to comply with the law when it was only through his acts that it could do so.
The moral of the story is that if you are the sole director of a company, the possibility of suing the company in circumstances such as this may not be open to you.
For further information on this article, please contact Fahmida Ismail on 0121 698 2200, email f.ismail@sydneymitchell.co.uk or fill in our online enquiry form.
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