Watt Liability? Director’s personal liability as an accessory to company wrongdoing- Barclay-Watt v Alpha Panareti Public Limited and anor [2022] EWCA Civ 1169

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Watt Liability? Director’s personal liability as an accessory to company wrongdoing- Barclay-Watt v Alpha Panareti Public Limited and anor [2022] EWCA Civ 1169

Published 14 octubre 2022

A company was found liable to investors for its failure to advise of particular currency risks.  However, the director was not personally liable – the Court of Appeal dismissed a claim that a director should be liable as an accessory to the company’s wrongdoing.  This case reaffirms the general proposition that third party claims against directors where a company has acted negligently will be confined to narrow grounds.


Alpha Panareti Public Ltd (“APP”) was the developer and vendor of luxury properties in Cyprus.  APP used an aggressive marketing campaign to entice investors to purchase properties to let as tourist accommodation.  Mr Andreas Ioannou was a director of APP and the “driving force” behind the company’s marketing campaign. 

The claimants purchased a property from APP, funded primarily with a loan from Alpha Bank Cyprus.  The claimants were UK residents and unsophisticated investors, but they understood that the loan would be secured by a mortgage on the property, with rent covering the mortgage repayments.  APP described the mortgage as “exclusive” to its clients at a low cost, because the funds were borrowed in Swiss francs with a low interest rate. 

Borrowing money in Swiss francs involved a currency risk for UK residents but the claimants were neither warned of these risks by APP, nor understood these risks.  Subsequently, the claimants became “increasingly and overwhelmingly” indebted to Alpha Bank Cyprus after the value of sterling fell.

At first instance, the claimants successfully argued that APP failed to warn investors of the foreign currency risks but failed in a claim against Mr Ioannou as director.  On appeal, the claimants sought to challenge the finding that Mr Ioannou was not personally liable as an accessory of APP’s negligence because he:

  • substantially assisted APP to commit this negligence;
  • did so pursuant to a common design with APP to sell properties by promoting the benefits of a mortgage in Swiss francs; and
  • was instrumental in the marketing campaign, which failed to mention the currency risks.


The Court of Appeal unanimously dismissed the appeal, reiterating that while APP was liable to the claimants for the failure to advise on the currency risks, Mr Ioannou was not. His actions constituted no more than operating the business (which was a limited liability company) and there was no assumption of personal liability.

Determining whether a director is personally liable as an accessory for the corporate’s wrongdoing is fact specific.  The Court held that (1) APP was in the business of developing and marketing properties (not Mr Ioannou personally); (2) the claimants contracted with APP (not with Mr Ioannou personally); and (3) APP committed the tortious acts (not Mr Ioannou personally).

The Court took a pragmatic approach concluding that if Mr Ioannou was found personally liable as an accessory, then any director heavily involved in marketing an investment who fails to warn of a risk, could similarly find themselves in troubled waters.  Limited liability shields a director from personal liability in tort, as it does in contract.

The Court held there was no “common design” as alleged, and no deliberate decision by Mr Ioannou not to warn investors of the currency risks, resulting in a breach of the company’s duty of care to the claimants. 

The Court of Appeal concluded that to allow the claim would lead to an “unduly wide view of the personal liability of directors”.

Implications for directors and their insurers

This Court of Appeal decision is welcome news to directors and their insurers. It narrows the scope of director liability, and confirms that for a director to be held personally liable as an accessory to the company’s tort, the director needed to assist in the tort pursuant to a common design.  However, it is important to remember that there is no ‘one size fits all’ approach, and the court will closely examine the particulars of each case.    Although it is often difficult to strike-out a claim where the determination is likely to be fact specific, the clarity provided by this Court of Appeal decision may mean fewer claims of this type are pursued and opportunities will arise to argue that there are no realistic prospects of a claim succeeding before a full trial – reducing defence costs and the risk of indemnity payments for insurers.  


Graham Ludlam

Graham Ludlam

London - Walbrook

+44 (0)20 7894 6442

Claudia George

Claudia George

+44 20 7894 6921