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Farrer & Co | A timely reminder of the pitfalls of service of proceedings on overseas Directors

The problem

Directors of English companies may be giving prospective claimants an unnecessarily easy shot at them. Serving English Court proceedings on a Director can prove difficult: there are strict rules about when, where and how a person needs to be served. In addition, if a Director is not ordinarily a resident in England, a separate (and sometimes challenging) process will need to be followed to allow service of the documents on the Director abroad. However, unwary Directors may be exposing themselves to a relatively little-known loophole which can see them served with English Court proceedings quickly and easily.

All Directors of companies in England are obliged to provide an address at which they can receive service of documents. Some Directors may give this issue little thought, as they are unconcerned about receiving service of documents related to the company. Many simply nominate the company’s registered office address, perhaps to maintain the privacy of their home address. However, a recent High Court judgment (Brouwer v Anstey [2019]) serves as a timely reminder to Directors to consider carefully what address they provide as it can have unforeseen consequences.

The law

Section 1140 of the Companies Act 2006 provides that: (a) documents may be served on a Director by sending it to their registered address; (b) a person’s registered address is “any address…shown as a current address in relation to that person in the part of the register available for public inspection”: and (c) this rule applies whatever the purpose of the document in question.

The judgment in Brouwer v Anstey (and an earlier decision in Key Homes v Patel [2015], which are the only two reported cases on this subject) highlights the risks of s1140 for Directors:

  1. Section 1140 allows for service of any documents on a Director in this way. Consequently, Directors can be served at the registered address with legal proceedings that relate to their private affairs and are completely distinct from the affairs of the company.
  2. A Director who is a foreign national but who gives a service address in England (e.g. the company’s registered office) may be served in England in this way. Consequently, any Director giving an English address for service of documents is deemed to have submitted (for the purposes of service) to the jurisdiction of the English Court and the usual rules on service of English proceedings outside the jurisdiction can be bypassed completely.
  3. If a Director gives an address for service, he/she cannot then claim not to have seen the documents sent there. The Director will be taken to have received them in good time and, if it turns out that post sent to that address is in fact checked only periodically, that will not be an acceptable excuse for the Director. Given that Court proceedings have a strict deadline for filing a Defence, this can result in the Director only becoming aware of a claim after the deadline has passed for defending it and judgment has been entered against the Director.

The solution

Directors cannot avoid giving an address for service. However, when doing so, they should: (a) be aware of the consequences (as set out above); (b) provide an address at which post will be checked regularly; and (c) unless a Director is happy to be subject to the service jurisdiction of the English Courts, give an address outside the UK, as this will force a claimant to follow the non-UK service rules which are complex and often time-consuming. In short, think carefully about what address is given.

If you require further information about anything covered in this briefing note, please contact Jolyon Connell, or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, April 2019

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