United Kingdom: Directors and Officers

As the financial lines sector navigates through 2026, insurers face mounting pressures from building safety claims extending beyond cladding issues, the rapid integration of AI in professional services, and new corporate crime legislation expanding director liability. With soft market conditions driving growth opportunities but also heightened risk exposure, how should insurers balance competitive positioning against emerging threats in construction defects, technology-driven claims, and management liabilit

The Supreme Court has delivered a landmark ruling on directors' duties under section 172 of the Companies Act 2006, establishing that good faith requires more than honest belief in pursuing a company's best interests. This case arose from a dispute where a chairman covertly delayed a planned company sale, believing it would yield better returns, but in doing so misled the board and breached his fiduciary duties.

When liquidators of Styles & Wood Group assigned potential claims against directors to a third party, the directors challenged this decision in the High Court. The court had to determine whether the directors had standing to bring the challenge and whether the liquidators' decision to assign the claims was objectively reasonable.