Mazur Appeal: Clarification for Litigation Practice
The decision in Mazur v Charles Russell Speechlys LLP has attracted significant attention across the profession, and for good reason. It addresses an issue at the heart of modern litigation practice: how far non-authorised staff can be involved in litigation work, and where the line is drawn between delegated tasks and the conduct of litigation itself.
For law firms, the Court of Appeal’s ruling is an important reminder that litigation is often delivered through teams, not individuals acting in isolation. The judgment provides welcome clarity on how that team-based model fits within the statutory framework, while also reinforcing the importance of supervision, accountability and proper delegation.
The background
At the centre of the case was a question that many firms will recognise in practice: can legal executives, paralegals or other non-authorised staff carry out litigation work as part of their day-to-day roles within an authorised firm?
The High Court took a more restrictive approach, holding that the right to conduct litigation attaches to authorised individuals rather than to firms as a whole, and cannot be conferred simply by employment. On that view, non-authorised staff could assist with litigation, but the formal conduct of litigation had to be carried out by someone personally authorised.
That interpretation caused understandable concern, particularly for firms that rely on supervised teams to manage litigation efficiently and effectively.
What the Court of Appeal clarified
The Court of Appeal has now provided greater clarity on how the statutory framework should be understood in practice. Its judgment draws an important distinction between the tasks involved in litigation and the carrying on of the conduct of litigation.
In practical terms, the Court recognised that litigation work is frequently carried out by teams, with authorised individuals directing and supervising work that may be performed by non-authorised colleagues. The key point is not that every task must be done personally by an authorised person, but that the authorised person must retain responsibility for the conduct of the litigation and ensure appropriate oversight.
That is a significant clarification for firms. It confirms that properly supervised delegation remains part of legitimate legal practice, and that the use of support staff in litigation teams is not, in itself, contrary to the statutory scheme.
Delegation and supervision
The practical message from the judgment is clear: delegation is permitted, but it must be done properly.
Non-authorised individuals may carry out litigation-related tasks on behalf of an authorised person, provided those tasks are undertaken within a suitable supervisory structure. The authorised person remains responsible, and the firm must ensure that direction, control and accountability are clearly maintained.
This does not dilute the importance of regulatory compliance. On the contrary, it reinforces the need for firms to be able to show that supervision is real, not merely nominal. Clear internal processes, defined responsibilities and appropriate oversight will remain essential.
What this means for firms
For most firms, the judgment should be reassuring. It confirms that team-based working models can continue, and that legal executives, trainees and paralegals can continue to make a meaningful contribution to litigation work under proper supervision.
At the same time, the decision is a prompt for firms to review how they structure litigation teams and document supervision arrangements. In particular, firms may wish to consider:
- how responsibility for litigation matters is allocated.
- whether supervision arrangements are clearly recorded.
- how delegated tasks are monitored and reviewed.
- whether staff understand the limits of their role.
- whether file management systems reflect the realities of supervision and oversight.
Those steps are not simply about risk management. They also support efficient, scalable and client-focused service delivery.
Why the case matters
Although the decision resolves an important point of principle, Mazur remains significant because it has brought renewed focus to the boundaries of reserved legal activities and the practical operation of litigation teams. It is a reminder that legal work must be structured not only around service delivery, but also around the regulatory framework that governs who is entitled to do what.
For firms, that means this is a good moment to take stock. The judgment offers reassurance, but it also underlines the value of clear governance, robust supervision and careful allocation of responsibilities within litigation teams.
Looking ahead
The immediate uncertainty created by the earlier High Court decision has now been eased, but the wider conversation about supervision and reserved activities is likely to continue. Firms that take the time to review their processes now will be better placed to adapt confidently and demonstrate compliance.
In a profession that increasingly relies on collaborative working, the Court of Appeal’s judgment is a timely reminder that proper delegation and proper supervision do not compete with effective litigation practice; they are an essential part of it.
“Last Call”: Your Options Before the Pub Doors Close
British pubs are woven into the fabric of local life in the UK.
However, rising business rates, higher national insurance costs, increased minimum wage obligations and general inflationary pressures, together with lower footfall, have squeezed margins across the industry. An analysis of official government statistics by tax specialists at Ryan shows that 366 pubs were either demolished or converted to alternative uses in the 12 months to December 2025. These losses reduced the total number of pubs, inclusive of vacant sites, from 38,989 to 38,623 across England and Wales.
For pub owners faced with the threat of insolvency, it is imperative that you understand your obligations to creditors and employees. Any delay in seeking legal advice, especially if you are a company director, might increase your liability and reduce your chances of an orderly wind-down.
Under the Insolvency Act 1986 and Companies Act 2006, directors must take creditors’ interests into account where insolvency is probable or imminent. Continuing to trade when there is no reasonable prospect of rescue can expose directors to wrongful trading claims under section 214 of the Insolvency Act 1986. This can result in personal liability for losses incurred during the period of wrongful trading and, in serious cases of misconduct, director disqualification or other sanctions.
Personal Guarantees and Secured Creditors
It is common practice for pub operators to enter into a lease agreement or borrowing arrangement that includes personal guarantees. This essentially means that if a business fails, lenders are able to pursue the guarantor personally for any outstanding debts.
What should directors do?
Where it becomes apparent that the company has no realistic prospect of avoiding insolvency, directors should consider the following options:
1. Creditors’ Voluntary Liquidation (CVL)
A CVL is appropriate where a company is insolvent and there is no realistic prospect of rescue.
It is a director-initiated, shareholder-approved statutory process, under which:
- directors take steps to place the company into liquidation
- shareholders approve the decision
- a licensed insolvency practitioner is appointed as liquidator
- the liquidator takes control of the company, realises its assets, and distributes funds to creditors in the statutory order of priority
Entering into a CVL at the appropriate time can help directors demonstrate that they are taking steps to minimise losses to creditors.
Compared to compulsory liquidation (where a creditor applies to court), a CVL generally allows greater control over timing and the choice of liquidator.
2. Administration (including Pre-pack Sales)
Administration is a formal insolvency process in which an administrator is appointed to take control of the company, displacing the directors.
The purpose of administration is to:
- rescue the company as a going concern, or
- achieve a better outcome for creditors than liquidation
In practice, the administrator may continue trading the business, restructure operations, or market the business for sale.
In some cases, the business or its assets may be sold as a going concern.
A pre-pack administration involves negotiating a sale prior to the administrator’s appointment and completing it immediately afterwards. This approach is often used to preserve value and maintain business continuity.
Administration may be appropriate where there is still a viable business, even if the company itself cannot be saved.
3. Moratorium
Under the Corporate Insolvency and Governance Act 2020, companies that are or may become insolvent can apply for a moratorium.
This provides a short-term breathing space (typically 20 business days), during which creditor enforcement action is restricted.
During this period:
- directors remain in control of the company
- a licensed insolvency practitioner acts as a monitor, overseeing the process
The moratorium can be extended and is intended to provide time to explore restructuring options where there is a realistic prospect of rescue.
Choosing the right option
The appropriate course of action will depend on the company’s financial position:
- No realistic prospect of rescue → CVL
- Viable business remains → Administration
- Short-term protection needed → Moratorium
Early advice is key to identifying the most appropriate route and reducing potential exposure.
The challenges facing the UK pub sector are significant and, for some operators, unavoidable. But the decisions made in the weeks and months before a business becomes insolvent can have profound legal and financial consequences.
If you are a pub owner or director facing financial distress or closure, early legal advice is essential. For confidential guidance on insolvency risk, director duties and dispute resolution, please contact our litigation team.
Can You Remove a Director for Breaching Their Duties?
The Directors’ Duties Series – Part 2
In our previous article on acting within powers, we introduced one of the key duties owed by directors under UK law.
All company directors must comply with the duties set out in Chapter 2 of Part 10 of the Companies Act 2006.
These duties include:
- Acting within powers
- Promoting the success of the company
- Exercising independent judgment
- Exercising reasonable care, skill and diligence
- Avoiding conflicts of interest
- Not accepting benefits from third parties
- Declaring any interest in a proposed transaction or arrangement
But what happens if a director breaches these duties?
Under English law, limited companies are generally free to determine their own internal governance. As a result, the appropriate route for removing a director will often depend on the company’s specific constitutional and contractual arrangements.
In practice, identifying the correct procedure is not always straightforward, and missteps can lead to disputes or legal challenges. Even where company documents do not provide a clear mechanism, shareholders may still rely on statutory rights under the Companies Act 2006 to remove a director.
Statutory Right of Removal: Procedure and Key Considerations
Under section 168 of the Companies Act 2006, a director can be removed by an ordinary resolution (more than 50% of shareholder votes).
However, strict procedural requirements must be followed including serving special notice must be given (at least 28 days before the meeting), the director must be informed of the proposed removal, has the right to make written representations and given the opportunity to speak at the meeting.
Failure to follow the correct procedure may render the removal invalid.
Breach of Duties and Shareholder Remedies
A breach of directors’ duties does not automatically result in removal, but it can give rise to legal action.
Shareholders may consider:
- Derivative claims
Shareholders may bring a claim on behalf of the company against a director for breach of duty, negligence, or misconduct. - Unfair prejudice petitions (section 994)
Where a director’s conduct unfairly prejudices shareholders’ interests, members may apply to the court for relief.
These remedies are particularly relevant in more serious or contested disputes.
Removing a director is rarely just a procedural step and can involve wider legal and commercial issues. For example:
- The director may also be an employee, giving rise to potential employment law risks, including claims for unfair or wrongful dismissal
- There may be contractual implications under any service agreement or shareholder arrangements
- Disputes can escalate quickly, particularly in closely held or family-run companies
Why Legal Advice Is Important
In light of these overlapping issues, taking legal advice at an early stage can be critical. It helps ensure the correct procedure is followed, manage potential risks, and reduce the likelihood of disputes or costly challenges.
Conclusion
While UK law provides a mechanism for removing a director, the appropriate approach will depend on the company’s governing documents and the specific circumstances. Starting with the company’s Articles of Association, together with taking legal advice where appropriate, can help ensure the process is carried out smoothly and in a legally compliant manner.
At Chan Neill Solicitors LLP, our Corporate and Litigation teams advise on director duties, shareholder disputes, and wider company governance matters, and are well placed to assist with issues arising from the removal of a director.
Restrictive Covenants in Property: What Buyers Should Watch Out For
When purchasing property in England and Wales, buyers often focus on price, location, and condition. However, legal restrictions affecting how a property can be used are sometimes overlooked. One of the most important of these is restrictive covenants, which can significantly limit what an owner can do with their property.
What is a Restrictive Covenant?
Restrictive covenants are often imposed by developers or previous landowners to preserve the character or value of an area and are commonly encountered in residential transactions.
Typical examples include restrictions on building extensions, using the property for business purposes, altering its external appearance, subdividing the property, or parking certain types of vehicles.
Although these restrictions may appear straightforward, their legal effect can be complex. Questions may arise as to whether a covenant remains enforceable and who has the benefit of it. In some cases, even long-standing covenants may still bind current owners.
Consequences of Restrictive Covenants
Restrictive covenants can significantly impact how a property is used or developed, potentially affecting its value and future.
If breached, the party with the benefit of the covenant may take legal action, including seeking an injunction or claiming damages. This can lead to costly disputes or delays, particularly during a sale or refinancing.
Given these risks, it is important to understand the implications of any restrictive covenants affecting a property. Professional advice can help clarify your position and address potential issues.
Conclusion
Restrictive covenants are a key aspect of property due diligence and should not be overlooked. Understanding these restrictions at an early stage can help buyers avoid unexpected limitations and potential disputes.
At Chan Neill Solicitors LLP, our Residential Property team advises clients on all aspects of property transactions, including identifying and managing risks associated with restrictive covenants.
Commonhold and Leasehold Reform: What It Means for Homeownership
Background: a new stage in leasehold reform
In our previous article, we discussed the proposed ground rent reforms, including the planned cap on ground rents for existing leasehold properties. These reforms form part of a wider effort to address concerns about the leasehold system in England and Wales.
On 27 January 2026, the Government published the draft Commonhold and Leasehold Reform Bill, which aims to modernise the system and promote commonhold ownership as the preferred model for flats in the future.
Understanding leasehold ownership
Leasehold ownership is the most common structure for flats in England and Wales. Under this system:
- A leaseholder owns the right to occupy a property for a fixed period, such as 99 or 125 years.
- The freeholder retains ownership of the land and building.
- Leaseholders typically pay ground rent and service charges to the freeholder or managing company.
While leasehold has long been used to manage multi-occupancy buildings, it has faced increasing criticism in recent years due to rising ground rents, complex service charges, and limited control for leaseholders over how their buildings are managed. These concerns have contributed to the Government’s broader efforts to reform the system.
What is commonhold?
Commonhold is an alternative form of property ownership introduced in England and Wales in 2002.
Under a commonhold structure:
- Individual owners hold the freehold title to their flats, known as “units”.
- Owners collectively manage shared parts of the building, such as hallways, roofs, and communal spaces.
- A commonhold association is responsible for managing the building and maintenance costs
Unlike leasehold, there is no landlord and no lease term that expires, giving homeowners greater control over the management and long-term future of their building.
Key differences between leasehold and commonhold (I might put them into a table to compare)
Leasehold
- Ownership is limited to a fixed lease term
- A freeholder owns the building and land
- Leaseholders may pay ground rent and service charges
- Major decisions about building management may be controlled by the freeholder
Commonhold
- Owners hold permanent freehold ownership of their units
- No ground rent is payable
- Building management is controlled collectively through a commonhold association
- Owners have a direct say in budgeting, maintenance, and management decisions
The Government’s reform agenda aims to make commonhold the default structure for new flats, replacing the traditional leasehold model over time.
Why commonhold has been rarely used
Although commonhold was introduced in England and Wales in 2002, adoption has remained limited. This has largely been due to developer preference for leasehold structures, lender caution, and practical challenges in converting existing leasehold buildings. The proposed reforms aim to address these barriers and make commonhold a more viable ownership model in the future.
Potential impact on landlords and tenants
For landlords and investors
Professional freeholders may see a reduction in traditional leasehold investment opportunities if commonhold becomes the default structure for new developments. This could affect income streams such as ground rent and other landlord-controlled charges.
For tenants and leaseholders
Homeowners may gain greater control over the management of their buildings, potentially improving transparency in costs and decision-making.
However, commonhold ownership also means residents take on greater responsibility for the management and maintenance of their building, which may require effective governance structures and cooperation among owners.
What this could mean for the future of property ownership
The draft reforms indicate a potential long-term shift in how residential buildings are owned and managed in England and Wales.
By promoting commonhold and restricting the use of leasehold for new flats, the Government appears to be moving toward a system where property owners have greater control over their homes and shared buildings, aligning the UK more closely with ownership models used in many other countries.
However, the transition will likely take time, particularly given the large number of existing leasehold properties.
How we can help
At Chan Neill Solicitors LLP, our residential property team regularly advises clients on leasehold and freehold transactions, including matters involving leasehold reform and changes to property ownership structures.
We assist homeowners, landlords, and investors in understanding how legislative developments may affect property transactions, management arrangements, and long-term ownership structures.
Mazur Appeal: A Defining Moment for Litigation Rights
The much-watched case of Mazur v Charles Russell Speechlys is now before the Court of Appeal and the stakes could not be higher.
At its core lies a fundamental question: Can legal executives and senior paralegals conduct litigation simply because they are employed within an authorised firm?
Last September, Mr Justice Sheldon held that they may not. His reasoning turned on the statutory framework for reserved legal activities. He concluded that the right to conduct litigation attaches to authorised individuals, not to firms in the abstract. Employment within an authorised practice does not, by itself, confer the right to carry out a reserved activity on someone who is not independently authorised.
The judgment emphasised regulatory clarity and individual accountability. If litigation is reserved, the person conducting it must personally hold the relevant authorisation. Non‑authorised team members can support the process, but the formal conduct of litigation must remain with an authorised individual.
For firms, the implications are considerable. Many operate leveraged models where legal executives and senior paralegals perform substantial litigation work under supervision. If the judgment stands, firms may need to restructure supervision frameworks, reallocate responsibilities, and increase authorised headcount.
We will continue to monitor developments closely and provide further updates as the appeal progresses.
What permission do I need to visit the UK?
Back in the day, the United Kingdom had a manual visa-free entry method for non-visa nationals, who simply had to physically appear at the UK Border and were allowed entry as a visitor for a period of up to 6 months. This changed in May 2023, when the UK Government introduced the Electronic Travel Authorisation (commonly known as ETA) to strengthen border security and digitise immigration.
The ETA is a digital permission to travel to the United Kingdom. It was first launched on the 25th of October 2023 for Qatari nationals, acting as the initial phase of a wider rollout and the first step toward the UK’s transition to the digital immigration system.
On the 1st of February 2024, the ETA was extended to other Gulf Cooperation Council States, namely, Bahrain, Jordan, Kuwait, Oman, Saudi Arabia and the UAE. On the 27th of November 2024, the ETA was opened for other non-European nationalities, including the USA, Canada, Australia and New Zealand.
The UK Electronic Travel Authorisation (ETA) scheme was opened to additional nationalities in March last year. Although European nationals were expected to begin applying from April 2025, the ETA did not become mandatory at that stage.
Mandatory enforcement will instead begin on 25 February 2026, at which point all eligible non-visa nationals travelling to the United Kingdom, including European nationals, must hold a valid ETA prior to travel.
An up-to-date list of eligible nationalities is available on the UK Government website: https://www.gov.uk/guidance/check-when-you-can-get-an-electronic-travel-authorisation-eta
At the time of writing, the ETA costs £16. The application process implies the submission of an application form, which can be done via the UK ETA app (available on Google Play and the App Store) or online. The process time varies from 1 to 3 working days, with further delays possible. More information about how to apply can be found here: https://www.gov.uk/eta/apply.
The ETA is valid for 2 years or until the passport, which was used during the application process, expires, whichever is sooner.
The carriers can deny boarding to anyone who requires an ETA but does not have one.
What if I am a visa national?
For visa nationals, the process of acquiring the right to enter the UK as a visitor involves a submission of a visa application and attendance at a designated Visa Application Centre, often in a country of residence, to submit biometric data.
As part of the UK’s wider transition to a fully digital border, physical entry clearance vignettes are being phased out in favour of eVisas, which are digitally linked to a traveller’s passport. While the exact date on which all visa nationals will move entirely to eVisas has not been formally confirmed, it is clear that from 25 February 2026, all travellers to the UK will be required to hold either a valid ETA or an eVisa linked digitally to their passport.
Essentially, an eVisa is a digital record of UK immigration status containing conditions of stay. Upon a successful visitor visa application, the applicant will be given instructions on how to create a UKVI account and how to demonstrate a valid permission to enter the UK to the carriers and at the UK border.
British dual nationals
This cohort of travellers does not require an ETA or eVisa. They can travel on a valid British passport or a passport endorsed with a Certificate of Entitlement (CoE). On the 26th of February 2026, the CoE vignettes will be replaced by a digital CoE and will not require renewal when a passport expires. Instead, the CoE holders will be able to update passport details via their UKVI account for free.
Other travellers
Certain individuals do not require an ETA or eVisa because they are exempt from the UK Immigration control. From the 25th of February 2026, this group of travellers will receive a Digital Record of Exemption, which will replace a physical exempt vignette in a passport.
The holders of Home Office Travel Documents, such as Commonwealth citizens and foreign nationals (often refugees), as of the 26th of February 2026, will be able to automatically link their status to the UKVI account.
Do I need a lawyer to assist with ETA and eVisa?
When applying to visit the UK, visa nationals (eVisa applicants) and non-visa nationals (ETA applicants) must meet the relevant Immigration requirements, which, at the time of writing, are set out in Appendix V: Visitor of the Immigration Rules.
For most applicants, the visa application process is usually straightforward and does not require legal assistance. However, applicants with a past or present criminal records, offences, and visa refusals, or activists should seek legal advice on eligibility under the Immigration Rules, to avoid disappointment of receiving a refusal.
At Chan Neill Solicitors LLP, we have decades of experience in assisting a wide range of travellers to the United Kingdom. Do not hesitate to contact our Immigration Team for advice and assistance.
This article is provided for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact us using the contact form or email us on reception@cnsolicitors.com
Ground Rent Reform
What the £250 Cap Means for Leaseholders and Investors
Last year, the Government signalled its intention to reform the leasehold system as part of its wider housing and cost-of-living agenda. In January 2026, that intention took a concrete step forward.
On 27 January 2026, the Government published the draft Commonhold and Leasehold Reform Bill (the Bill) for pre-legislative scrutiny, describing it as a key measure in its manifesto commitment to bring the “feudal leasehold system to an end” in England and Wales.
A central feature of the Bill is the reform of ground rent payable under existing long residential leases.
What is changing: the £250 ground rent cap
Under the proposals:
- Ground rents on existing long residential leases will be capped at £250 per annum
- The cap will apply for a 40-year transitional period
- After 40 years, ground rent will be reduced to a peppercorn (effectively £0)
This reform extends the protections introduced by the Leasehold Reform (Ground Rent) Act 2022, which abolished ground rents for most new residential leases, to leases granted before 2022.
The stated policy objective is to end leaseholders paying “over-the-top bills for no clear service in return”, while addressing the saleability and mortgage ability issues associated with escalating or uncapped ground rent clauses.
The Government estimates that some leaseholders could save more thousands over the life of their lease, and that the reform will help unlock stalled property sales where ground rent terms have made homes difficult to sell or refinance.
Why the ground rent cap is significant
Ground rent has long been a routine feature of residential leases, often payable without any corresponding service and, in some cases, subject to escalating clauses that significantly increase costs over time.
By introducing a statutory cap and a long-term transition to a peppercorn rent, the proposed reform marks a clear shift in how ground rent is treated within the leasehold system. It is intended to reduce financial pressure on leaseholders while addressing wider market issues, including saleability and mortgage lender concerns, by improving certainty and confidence in the residential property market.
Ground rent reform is also intended to address market dysfunction, particularly:
- Flats rendered unsellable due to onerous ground rent clauses
- Mortgage lender reluctance to lend on leases with escalating rents
- Leaseholders trapped in properties with diminishing marketability
How we can help
Chan Neill Solicitors LLP has an experienced residential conveyancing team advising on both leasehold and freehold transactions. We regularly assist clients in navigating regulatory change and its practical impact on property transactions and investment decisions.
What’s next?
In our next article, we will look beyond ground rent and explore other proposed reforms under the Renters’ Rights Act 2025, examining how they may affect landlords, tenants, and the residential property market more broadly.
Litigation Essay Competition 2026
Here at Chan Neill Solicitors, we are committed to delivering high-quality legal expertise, providing client-focused services tailored to businesses and individuals alike. We pride ourselves on providing strategic guidance and well-considered advice whilst protecting our clients’ interests. Our team of skilled legal professionals strive to become their clients’ trusted advisors in all aspects of their clients lives and businesses, working to help clients navigate complex legal challenges, fostering trust and long-term relationships.
We are, therefore, pleased to announce our inaugural Litigation Essay Competition! We are looking to foster debate, critical thinking, and practical writing abilities in law students and legal professionals at the very start of their career. Entries will be judged on the quality of their legal research, understanding of statute and case-law, and their ability to set out and defend it.
Please select from one of the following questions:
- Part 36 offers of settlement serve the purpose of ensuring parties to litigation seriously consider settlement. However, to what extent can Part 36 settlement offers be strategically misused and/or abused, and how?
- The use of AI has become increasingly common in everyday life. To what extent should litigants make use of AI, and what are the potential pitfalls of doing so?
- The “Mazur decision” has sent shockwaves throughout the litigation market. What areas within the litigation sphere have been most impacted, and what steps should be taken to ensure compliance?
- “Ignorance is not a defence”. To what extent does this fundamental legal principle still hold true?
This opportunity is open to undergraduates, post and recent graduates without a training contract or pupillage.
In addition to your essay submission, please write 50 words outlining what stage you are at in your studies and that you do not yet have a pupillage or training contract. Please also confirm that you have not used Artificial Intelligence.
Rules
- Essays must be no more than 1,500 words (excluding footnotes).
- Answers should be sent to tboyton@cnsolicitors.com in Microsoft Word format. The covering email should state the entrant’s full name, present (or most recent) university/college and contact details (judging is anonymous). All submissions will be acknowledged.
- Any submissions found to be AI led will be immediately disqualified
- This opportunity is open exclusively to those in the UK.
- The deadline to submit is Monday, 2nd March 2026
Each essay is judged against the following criteria:
1. Legal and case analysis;
2. Structure; and
3. Legal writing style.
HOW THE COMPETITION IS JUDGED
Essays are judged in two stages:
- In the first instance, members of the Litigation Team will review all entries to select a shortlist.
- At the second stage, the prize-winners are decided by the Head of Litigation.
REWARD
The top prizes for the competition are as follows:
Winner – Two week Vacation Scheme and a 1-1 discussion on work with Litigation Head ·
Runner Up – One week Vacation Scheme
The winning essays will also be published on the Chan Neill Solicitors LLP website.
Acting Within Powers: Why Your Company’s Rulebook Matters
The Directors’ Duties Series – Part 1
When Annie joined the board of a growing fintech start-up, she didn’t think much about the company’s Articles of Association. After all, wasn’t that just “boilerplate” paperwork filed years ago?
That assumption cost her.
Months later, Annie approved a new share issue to an investor - a move later challenged by other shareholders. The problem? The Articles required both board approval and a special shareholder resolution, which she hadn’t obtained.
The court found she had acted outside her powers under section 171 of the Companies Act 2006. The share issue was set aside, and Annie faced a claim by the company for breach of duty.
What Does Section 171 Require?
Directors must:
- Act in accordance with the company’s constitution, which includes the Articles of Association and certain formal resolutions, and may also operate alongside other governance documents such as shareholders’ agreements; and
- Only exercise their powers for the purposes for which those powers were conferred.
It sounds straightforward, yet this duty is frequently overlooked, particularly in fast-moving companies where “commercial urgency” tends to trump formalities. But failing to check your authority before taking key decisions can unravel months of work, create shareholder disputes, and expose directors personally to claims.
How to Stay Compliant
- Know your rulebook - Regularly check your company’s constitution before important decisions: issuing shares, signing material contracts, restructuring the company, approving major transactions, or any action that might require shareholder consent.
- Document your authority - Ensure that minutes and resolutions clearly record board decisions.
- Seek early advice - If you’re unsure, take legal guidance before acting, particularly where the Articles or shareholders’ agreements contain bespoke provisions. It is far easier to confirm authority than to unwind an unauthorised decision.
Directors who understand where their powers begin and end not only protect themselves, they build credibility and trust in the boardroom.
How We Can Help
At Chan Neill Solicitors LLP, we regularly advise company directors, boards, and shareholders on governance, compliance, and risk management under UK company law and related legislation.
If you are uncertain about the scope of your powers or other obligations as a director, or wish to review your company’s governance framework, Articles, board procedures, shareholders’ agreements, or compliance processes, our corporate team can advise on practical steps to ensure you meet your duties and manage risk effectively.
Get in touch with us to discuss how we can help you and your business.
Next in the series:
Promoting the Success of the Company (s.172) - balancing the company’s success with wider stakeholder interests.
Disclaimer:
This publication is intended for general information purposes only and does not constitute legal or professional advice. You should not act upon the information contained in this article without obtaining specific legal advice. Chan Neill Solicitors LLP accepts no responsibility for any loss which may arise from reliance on information contained herein.