Former directors who set up in competition: the first post-Companies Act 2006 case comes to light

A transcript has just been released of a company law case decided last year: Thermascan Limited v Norman.

It's the first reported case in England and Wales relating to those provisions of the Companies Act 2006 that govern conflicts of interest and the appropriation by directors of their company's business opportunities.

The case removes any uncertainty as to whether the Companies Act might have changed the way in which we advise company directors, who, having left their companies, propose to join or set up competing businesses. The analysis in the case does not produce a different answer than the common law the Act replaced.

In such a case, how do the courts balance the interests of the company with the public interest in permitting former directors to continue to earn a living using their pre-existing fund of skill and knowledge? In this case, in the former director's favour.

Wragge & Co's corporate experts have prepared a detailed analysis on the case.