The case of Thermascan v Norman centred around the statutory duty set out in the Companies Act 2006 s.175(1), which relates to the duty a director of a company has to avoid conflicts of interest.
The legislation sets out the duty that a company director has when they resign from their company and start up a new business in direct competition with the company of which they were previously a director. The duty to avoid a conflict of interest continues even after the person has stopped being a director "as regards the exploitation of any property, information or opportunity of which he became aware at a time when he was a director" (Companies Act 2006 s.170(2)(a)).
Mr Norman was a director of Thermascan Ltd. He resigned his position in 2008 and went to work with another company. However, this position only lasted a few months before Mr Norman was made redundant . Following this, he then set up his own company, Hotspot-Thermography Ltd.
The post-termination restrictive covenants in his contract with Thermascan had come to an end by this time, so Thermascan applied for a court order under the Companies Act 2006 to prevent Mr Norman from canvassing or soliciting their clients.
In coming to its decision, the court had to balance the legitimate right of Thermascan to prevent Mr Norman exploiting contracts that were negotiated while he was a director of the company with his right to exercise the skills, knowledge and experience he had acquired in his former position.
Significantly, the court ruled that the provisions in question in the Companies Act 2006 did not change the pre-existing laws relating to this situation.
The final ruling determined that, while Mr Norman had some limited fiduciary duties to Thermascan even after having resigned as a director, there was no outright prohibition on him soliciting or canvassing business from Thermascan clients.
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