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Jenny, Solicitor
Category: Law
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English law: Private company husband and wife directors- famikiy

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English law: Private company husband and wife directors- famikiy business." bank accounts opened in name of company-one deposit the other current account used for daily business. Clients paid into that account by standing orders. Directorsd used current account and were signatories.Directors instructed bank to close deposit account.Bank negligently closed both accounts stultifying business so standing orders returned and not paid. Bank admits negligence. Directors dependent upon current account and lost income. Does bank have duty of care to directors in the correct conduct of the account? Consequences of closure would have been forseeable
Hello my name is ***** ***** I am happy to help you today. Have the bank admitted they were wrong to close the account? Has the company suffered a loss as a result of this?
Customer: replied 2 years ago.
Yes they have admited wrongful closure.Directors have suffered loss
Ok is the loss in the form of bank fees/ returned standing orders? Please can you clarify? Are you one of the directors?
Customer: replied 2 years ago.
I am not a director. Loss consists of returned standing orders-also by virtue of this the direcors being dependent upon the income from the company qua the company have suffered loss due to deprature of clients and reputation due to perceived financial irregularities.
Ok what is your interest in this if you are not a director?
Customer: replied 2 years ago.
I am a Qualified Paralegal and have been consulted by the directors . Claim has been lodged notwithstanding admissions solicitors for bank now defending. They admit contractcual relationship bank and company.Wrongful closure pleaded as breach.Question remains the relationship between bank and directors. Is position too remote or by virtue of the bank's negligence affecting directors is a duty of care owed?
To Clarify is it the Company's bank account not the directors?
Customer: replied 2 years ago.
Yes in name of company.Bank aware of usage of account by directors and issued debit cards on that account in their name. Due to wrongful closure directors unable to use debit cards
Does the company still exist?
Customer: replied 2 years ago.
why is the claim being made by the directors and not the company? I think this is your difficulty. If the bank has been negligent and the company has suffered a loss then it is the company that should be suing the bank. I see the point that the directors can suffer a personal loss (through loss of profit and dividends) but due to to privity of contract laws the claim should be made by the company rather than the directors. The lost profit can be claimed by the company along with all of the other loses that you have stated. The simple way to resolve this is to apply to the court to amend the name of the claimant to the company.
Customer: replied 2 years ago.
Sorry .The claim is made by the company as one claimant and the direcors as the other claimant
Ok, but the loss is the same? I'm struggling to see why the directors suffer any loss over and above that which is suffered by the company?
Customer: replied 2 years ago.
The directors' loss is pleaded as loss by virtue of stress ,loss of reputation and the loss of personal revenue through the company etc .My original question goes to this point.Would they be able to say that the bank owed them a duty of care in this respect? The original loss would be contractual as between the bank and the company and the remaining liability being tortious as between the bank and the directors
Customer: replied 2 years ago.
One director does have heart and stress related medical problems and is on permanent medication
No that's the problem, the duty is to the account holder (the company) not the directors. The loss of revenue through the company is claimable by the company. Loss of reputation of the company is claimable by the company.
Customer: replied 2 years ago.
That is interesting. I assume that you saying that it is too remote- notwithstanding the effect that the conduct of th bank has on the directors persoanlly ie as would be the case in Donaghue and Stevenson?
Customer: replied 2 years ago.
Apologies for spelling!
This is a different situation from the case you cite. In that instance there was no other remedy. In your situation the company can claim , I am not clear what added benefit you will get from trying to argue the directors have additional rights in negligence.
Please do let me know if there is anything further you would like to know.
Customer: replied 2 years ago.
I appreciate what you say. I could amend the pleadings but am wondering how a company can suffer stress! The loss of reputation would be relevant I think as indirectly this would fall upon the directors-If not amending pleadings this could be argued in any event- do you agree?
Yes it could be argued in any event. I am not saying that you need to amend pleadings as you have the Company as a claimant in the first place (at first I thought it was just the directors bring the claim which was a worry).
If you are put on a costs notice as regards ***** ***** directors' claim then you need to consider your position carefully as it may not be in the best interests of the directors solely for a stress claim. This is a personal injury type claim and would not have great financial value without significant medical evidence and loss of ability to work etc.
Good luck with it.
I would be grateful if you would take the time to rate my answer. Thank you and all the best.
Jenny and 2 other Law Specialists are ready to help you
Customer: replied 2 years ago.
Dear TaratillMany thanks- very interesting and useful adviceKind regardsBill Caselton