The answer to this question will often depend on the allegation that supports the remedy sought.
Where an insolvency claim exists, for example preferring a creditor or causing or allowing the company to be involved in a transaction at an undervalue, then there are various statutory defences to such claims.
Generally, there may also be counterclaims to consider. For example, where a simultaneous claim exists in favour of the director against the company. However, caution must be taken when considering such claims as set-off is generally not available to counter a claim for misfeasance.
Reliance on professional advice could be a defence to any such claim, but this will be largely dependent on the individual circumstances.
In addition, there is a provision under the Companies Act 2006 that provides for a statutory defence where it can be demonstrated that a director acted with honesty and integrity in such matters and was innocent to the losses being caused or suffered as a result of his/her actions.
However, honesty alone will not provide a defence where the decisions or actions of the director were not reasonable.
The court will take account of the standards expected of a director generally, and the standard expected of a director with the qualification, skills and experience of the individual subject to the proceedings.
