Non-party costs orders — directors beware? Threlfall v ECD Insight Ltd

By Lottie Fry

The appeal judgment in Threlfall v ECD Insight Ltd raises the prospect that a director may be held liable for costs owed by a company.

In the first instance, judgment was given against the first defendant company, ECD Insight Ltd, a management and coaching consultancy. The claimant, Alex Threlfall sought an order that second defendant, Mr Whitney, a director of the company, should be jointly and severally liable with the company for the costs of the action. Threlfall was a previous employee of the company. He had brought a claim for breach of contract, arguing that his employment contract had been varied by agreement between himself and Whitney. This agreement entitled him to a share in equity and dividends as well as other benefits. Whitney and the company had been joined as parties to the action, as any order in favour of Threlfall would have required either a transfer of shares by Whitney or the company to issue and allot shares to Threlfall, thus diluting Whitney’s sole shareholding…

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