Separating Personnel and Business Assets

[tim123]

Actually it depends on the contract, if it is a pure B2B contract and you are not named in the contract then it is the company that is sued not you. You will however be liable if you did not comply with the terms of required indemnity cover in your contract though.

This isn't going to make any difference.

It matters not who is named as performing the work in the conract. It is the bod that actually turns up that is the deciding factor.

So, (ignoring here all the quite reasonable steps that you can take not to be found guilty), if you *are* "professionally negligent" then you are "professionally" negligent and are personally liable for the mistake that you made. Contractual clauses are there for "contractual mistake" they count for SFA in a PN case, quite apart from the fact that if your mistake killed or injured someone [1] they are automatically void and can be voided by the courts in other situations (as in ICL v St Albans Council).

As to the quantum, if the court finds you liable to pay X. Then X is what you must pay. The court doesn't care tuppence if to get the money you have to sell your house, it's not their problem, it's yours. If you have insurance this will pay out first, but if the claim is more than the insured value you get to pay the rest. If you can't pay you can become bankrupt, but you lose the house first if you do this. Finally, there is case law that takes the value from some types of pension to pay, so this isn't always safe either.

[1] Yes I know that the average IT bod is not in a position to kill someone, but working in Process Control, Automotive and Avionics, they are.

tim

[Lowery]

Just had a chat to the PCG Legal Helpline on this issue and they said....(basically it's what boredsenseless posted).

If it is the ltd co providing the service (i.e. it is the ltd co name on the contact not your name)?

You are the employee of that ltd co provides the service.

If the client wishes to sue someone then it is the ltd co that is sued not the employee or director. Therefore personal assets (e.g. homes etc...) do not come into it. They are completely separate.

The only way a Director could be liable is if he/she has provided a personal guarantee (e.g. Bank Loan).

I went through different scenarios with them and it was the same deal….the employee/director is not sued…it is the ltd co.

Thoughts?

[tim123]

The only way a Director could be liable is if he/she has provided a personal guarantee (e.g. Bank Loan).

I went through different scenarios with them and it was the same deal….the employee/director is not sued…it is the ltd co.

Thoughts?

Except in the case where a person has been professionally negligent.

The general advice that directors are not liable for the mistakes that the company make is true for a director of a large company who does none of the 'day to day' work.

However, as a working director you are wearing 2 hats. When you are wearing your 'personal' hat and writing code, installing a network or whatever, the person performing that task is *personally* responsible for that task being done to the appropriate professional standard, unless it can be shown that this responsibility has been willingly taken on by another REAL person (and not forced upon that person by a contractual condition, which will be unenforcable).

If this is not done (and it should be noted that making a simple mistake is no where near enough to show that the job has not met a professional standard) the individual can be sued for the error in their own right. This applies whether the person is a company director or a minimum wage PAYE numpty.

tim