Disclosure and the Director’s Fiduciary Duty of Loyalty: Item Software v (UK) Ltd v Fassihi [2005] 2 B.C.L.C. 91
Posted: January 23, 2006
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Introduction
Where a director breaches his duty to the company by making a secret profit, company law provides a simple solution in the form of an action for damages in which the director is called to account for any profit made. Where a director takes steps to make a secret profit in circumstances where the company sustains damage, but where the director does not succeed in making that secret profit the remedy for the company was, prior to the Court of Appeal decision in Item Software, less clear cut. It is now clear that a claim based on a fiduciary duty of loyalty will provide that remedy.