Jersey: Calling Time: English High Court Declares Limitation Period On Claims Against Directors Of Jersey Companies

On the 15th May 2017, the Chancery Division of the English High Court in O'Keef & Anor v Caner & Ors [2017] EWHC 1105 (Ch) held, as a matter of fact, that the appropriate prescription period for a claim against directors of a Jersey company for breach of their duties under Article 74 Companies (Jersey) Law 1991 was 10 years from the date of breach.


The Claimants were joint liquidators of two Jersey companies. Between 2007 and 2008 €34m was withdrawn from the companies' bank accounts and paid to the companies' UBO, who was also a director of both. Those payments were not made in good faith or for a legitimate or commercial purpose and could not be properly treated as distributions. The joint liquidators brought claims against certain professional directors of the companies who allowed the payments to be made when the companies were effectively insolvent.

The duties relied on were those set out in Article 74(1) Companies (Jersey) Law 1991:

"A director, in exercising the director's powers and discharging the director's duties, shall –

  1. act honestly and in good faith with a view to the best interests of the company; and
  2. exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances."

The issue of what prescription period applies to a breach of the duties in Article 74 has been a running source of controversy in the Jersey authorities for over 10 years since the decisions of In Re Northwind Yachts Ltd 2005 JLR 137 and Alhamrani v Alhamrani 2007 JLR 44.

The Issue

As a preliminary issue the defendant directors contended that the claims were prescribed under Jersey law because the limitation period for such claims was 3 years (claims against directors being analogous to claims in tort or a breach of trust, for which the period is 3 years). The liquidators contended that the applicable prescription period was 10 years, being the default period applicable to actions personnelle mobiliére (personal actions) in Jersey law.

The Arguments

The competing arguments for the appropriate prescription period were analysed by looking at the different nature of the duties contained in Article 74, those that were fiduciary in character (Art 74(1)(a)) and those which could broadly be described as a duty of care and skill (but which were not fiduciary in character – (Art 74(1)(b)).

The competing possible prescription periods were:

  1. Three years based on tort because either:

    1. as directors' duties in Jersey law were statutory, breach of them must ipso facto constitute the tort of breach of statutory duty to which Article 2 Law Reform (Miscellaneous Provisions) (Jersey) Law 1961 applied directly; or
    2. Article 2 Law Reform (Miscellaneous Provisions) (Jersey) Law 1961 applied to breaches of both Article 74(1)(a) and (b) directly or by analogy; or
    3. the statutory three year period applicable to breach of trust claims under Article 57 Trusts (Jersey) Law 1984 was applicable either directly or by analogy with a breach of a directors' fiduciary duty.

In default of either of those arguments succeeding, a period of ten years was applicable because no other period could be applied directly or by analogy.

Direct or analogous application of tortious prescription period

The court held that Article 57(2) Trusts (Jersey) Law 1984 had no direct application to actions for breach of director's duty. Neither was the court convinced that Article 57(2) could appropriately be applied by analogy.

The directors of a company are not by virtue of their office trustees of the company's property. The company is legally and beneficially he owner of its own property. Article 1 and 2 Trusts (Jersey) Law 1984 define the office of trustee strictly so as to preclude the direct application of Article 57 to directors (affirming Birt DB in Northwind Yachts at para 30). That is not to say that a direct may not become a constructive trustee (and subject to Article 57 by virtue of being a constructive trustee) of the company's property coming into his hands (see Article 33 Trusts (Jersey) Law 1984).

Notwithstanding that directors and trustees owed substantially similar duties, the court held that Article 57 Trusts (Jersey) Law 1984 could not be applied by analogy to directors. It was not necessarily wrong in principle to look to Article 57 as analogous but that in order to neatly shoehorn directors into Article 57 would involve closing one's eyes to parts of the interlocking, self contained prescription regime applicable to trustees. Looking closely at Article 57 reveals that the three year starting point at which the statutory three year period begins differed depending on a number of situations, to which there was no easy analogy with the position as between a company and its directors. Put another way, Article 57 is too specifically tailored to the position of trustees to make it easily analogous to the duties of a director to his company.


The English High Court has therefore held that an action for breach of either limb of Article 74(1) Companies (Jersey) Law 1991 is 10 years.


The decision in Caner is a finding of an English court and is not binding in Jersey as statement of Jersey law. However it is the first time that the issue of prescription against Jersey directors has been dealt with in any comprehensive way and were the issue to come before the Jersey court, the decision is likely to be persuasive.

The conclusion that the prescription period applicable to the tort of negligence does not apply directly or by analogy with Article 74(1)(b) on the basis that the duty is not tortious but quasi-contractual is likely to be a source of controversy. The working assumption of many practitioners is that Article 74(1)(b) is concerned with a director's reasonable care and skill, i.e. negligence. Negligence, in Jersey law, is a tort. There is no meaningful distinction in Jersey law between an equitable and customary law duty of care in the same way as exists in England. Indeed, the decision acknowledges that even in England the content of an equitable duty of care and common law duty and the remedies flowing from breach of those duties are practically identical.

The 10 years prescription period is subject to the Jersey doctrines of empêchement de fait, with the potential to extend the applicable prescription period longer than 10 years where there is an practical impediment to being able to commence a claim.

There is a widespread perception that a ten year prescription period for breaches of directors' duty is too long for an island where financial services is the dominant sector of the economy. I would not be surprised if the States of Jersey resolved any further controversy by bringing forward a statutory prescription regime for claims against company directors claims when the Companies (Jersey) Law 1991 is next amended.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.