Director disputes

Director disputes often arise from disagreements over the future direction of the business, allegations of misconduct or breach of duty, or conflicts over the appointment or removal of a director. These disputes may stem from personality clashes, unclear governance structures, or competing shareholder interests.

Directors owe a number of statutory duties under the Companies Act 2006, including the duty to promote the success of the company, avoid conflicts of interest, exercise reasonable care and skill, and act within their powers. Breaching these duties can give rise to legal action by the company or shareholders.

Yes, a director can be removed by the shareholders using the procedure set out in the Companies Act 2006, or in accordance with the company’s articles of association. However, the process must be followed carefully, and there may be contractual or employment law consequences, particularly if the director also holds a service contract.

You should take early legal advice. Acting too quickly without advice or without evidence could escalate the situation or expose you to liability. Our team can help assess whether there is a genuine breach of duty, advise on options such as internal investigation or board action, and protect your position if matters develop further.

Many director disputes can be resolved through Alternative Dispute Resolution (ADR) methods such as mediation, negotiation, or expert determination. These methods are generally faster, more cost-effective, and private. We will always explore settlement options before recommending litigation.

Yes. In certain cases, minority shareholders can bring a derivative claim on behalf of the company or apply to the court for relief under unfair prejudice provisions. These are complex claims, and early advice is essential to assess your standing and the strength of the case.

Evidence might include board minutes, email correspondence, financial records, shareholder agreements, or internal communications. The stronger and more contemporaneous your evidence, the better the prospects of resolution. We can assist with gathering and evaluating relevant documents.

We act for both. We regularly represent companies, boards, individual directors, and shareholders—whether they are bringing or defending a claim. We will always identify and manage any conflict of interest at the outset and can work alongside your internal or external advisers where appropriate.

Costs vary depending on the complexity of the dispute, the legal process involved, and whether the matter settles early or proceeds to court. We offer initial fixed-fee consultations, clear fee structures, and alternative funding arrangements in appropriate cases. Cost transparency is a priority from the outset.

Yes. We regularly advise businesses on setting up clear governance structures, director service agreements, and shareholder agreements to prevent ambiguity and reduce the likelihood of future disputes. Prevention is often the best—and most cost-effective—strategy.