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Claims examples: Private companies
Chubb Specialty Insurance
Two employees were killed whilst attempting to repair dangerous machinery. The company’s managing director and several technical
managers were prosecuted for breach of health and safety legislation. Defence costs were £890,000.
Disqualification for insolvent trading
Two directors knew that their company could not realistically avoid collapsing, but carried on trading. In the last two weeks
before receivership the company incurred VAT liabilities of £50,000, which were never satisfied. For this insolvent trading,
the directors were at first disqualified from being company directors in the future. On appeal the courts criticised the directors
but decided they were not incompetent enough to deserve the ban, so lifted it. Defence costs to achieve this narrow escape
are estimated at £100,000.
A small UK company was involved in building work in Normandy. One of its sub-contractors died from a fall at the site. A director
of the company was prosecuted in France for manslaughter and incurred a large amount of defence costs in understanding the
foreign procedures and achieving acquittal.
A manufacturer employed a waste disposal contractor to dispose of old oil. Contrary to the manufacturer’s expectations, the
contractor dumped the oil in a field and then became untraceable. The Environment Agency brought criminal proceedings against
the manufacturers’ directors and considerable defence costs were incurred to achieve their acquittal.
A director of a large training company was sued, along with his company, for allegedly misappropriating trade secrets. £700,000
was spent on defence costs and the case was settled for £1,400,000.
Whilst his company was in receivership, a director signed a company cheque to pay a key supplier. The cheque was dishonoured
and the director was found personally liable for the amount of the cheque.
As a result of his company allowing dangerous goods to be carried by air, a director was investigated by the Civil Aviation
Authority. Insurers paid legal representation expenses of £21,000 on his representation in that investigation.