The Jersey limitation period for claims against directors for breach of duty under Article 74 of the Companies (Jersey) Law 1991 has not been definitively decided by the Jersey Royal Court. Previously, it has only ever been considered obiter and on a tentative basis in two Jersey cases – In the matter of Northwind Yachts(1) and Alhamrani v Alhamrani.(2)
However, in 2017 the UK High Court in O'Keefe v Caner(3) (which addressed the law of prescription in Jersey applicable to claims for breach of directors' duties) found that the prescription period for claims against directors of Jersey companies for breach of their duties under Article 74 of the Companies (Jersey) Law was 10 years.
The 10-year period was held to apply to claims for breach of a director's:
- fiduciary duty to act honestly and in good faith with a view to the company's best interests (Article 71(1)(a)); and
- duty of care, skill and diligence (Article 74(1)(b)).
While this UK High Court decision is not binding on the Jersey courts, it is likely to carry considerable weight and will undoubtedly be given close attention by the Jersey Bar.
For further information on this topic please contact Nicola Roberts or Leon Hurd at Ogier by telephone (+44 1534 514 000) or email ([email protected] or [email protected]). The Ogier website can be accessed at www.ogier.com.
Endnotes
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