Review - Company directors’ liability for deceit

    View Author July 2010

    In the recent case of Lindsay v O'Loughnane a director was found liable for the tort of deceit after making a number of representations to a customer by email. The defendant had made an implied, but incorrect, representation that the company was solvent and trading properly. The case is of particular importance because it highlights the courts' increasing willingness to find directors liable for the tort of deceit where they misrepresent the solvency position of their company. This is a useful tool for creditors of insolvent companies in that they can make a claim without reference to the provisions of the Insolvency Act 1986. A creditor who makes a successful claim in deceit will be awarded damages and these will not be split or apportioned between other creditors of the insolvent company.