WILLIAM CAMPBELL AGAIN (FIRST) PETER GORDON JOINERS Ltd AND DEREK FORSYTH, the Liquidator thereof; and (SECOND) PETER GORDON [2015] ScotCS CSIH_11 (03 February 2015)

WILLIAM CAMPBELL AGAIN (FIRST) PETER GORDON JOINERS Ltd AND DEREK FORSYTH, the Liquidator thereof; and (SECOND) PETER GORDON [2015] ScotCS CSIH_11 (03 February 2015)

The Employers’ Liability (Compulsory Insurance) Act 1969 does not impose civil liability on directors for a company’s failure to insure; it imposes criminal liability only. The statutory duty to insure is imposed on the employer, not on directors, and the Act’s provision for criminal penalties indicates Parliament did not intend to create a private right of action against directors. There is no statutory or common law duty owed by directors to employees to arrange insurance, and the absence of explicit language imposing such liability, combined with the policy against imposing liability for pure economic loss, precludes such a right.

Citation
[2015] ScotCS CSIH_11
Parties
Pursuer and Respondent: William Campbell; First Defender and Reclaimer: Peter Gordon Joiners Limited; First Defender and Reclaimer: Derek Forsyth (liquidator of Peter Gordon Joiners Limited); Second Defender and Reclaimer: Peter Gordon
Jurisdiction
Scotland
Judgment Date
03 February 2015
Procedural Posture
Personal Injury / Statutory Duty Claim / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Appeal allowed in part; action against the second defender (director) dismissed; action against the first defender (company) to proceed to proof.
Legal Topics
Employers’ Liability Insurance, Directors’ Liability, Statutory Interpretation, Civil Liability for Breach of Statutory Duty, Economic Loss
Employment Law Company Law Insurance Law Personal Injury Law Employers’ Liability Insurance Directors’ Liability Statutory Interpretation Civil Liability for Breach of Statutory Duty +1 more

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Parties

William Campbell

Pursuer and Respondent

Peter Gordon Joiners Limited

First Defender and Reclaimer

Derek Forsyth (liquidator of Peter Gordon Joiners Limited)

First Defender and Reclaimer

Peter Gordon

Second Defender and Reclaimer

Procedural Posture

Personal Injury / Statutory Duty Claim / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Does the Employers’ Liability (Compulsory Insurance) Act 1969 impose civil liability on a director of a company for failure to insure, in addition to criminal liability?
  2. 2 Is there a private right of action against a director for an employee’s economic loss due to lack of insurance by an insolvent employer?

Ratio Decidendi

The Employers’ Liability (Compulsory Insurance) Act 1969 does not impose civil liability on directors for a company’s failure to insure; it imposes criminal liability only. The statutory duty to insure is imposed on the employer, not on directors, and the Act’s provision for criminal penalties indicates Parliament did not intend to create a private right of action against directors. There is no statutory or common law duty owed by directors to employees to arrange insurance, and the absence of explicit language imposing such liability, combined with the policy against imposing liability for pure economic loss, precludes such a right.

Court Disposition

Appeal allowed in part; action against the second defender (director) dismissed; action against the first defender (company) to proceed to proof.

Orders

  • Recall the Lord Ordinary’s interlocutor insofar as it refused the second defender’s motion for dismissal.
  • Dismiss the action against the second defender (Peter Gordon).