Section 172 directors’ duties: landmark ruling on honesty and good faith

In Saxon Woods Investments Limited v Francesco Costa [2025] EWCA Civ 708, the Court of Appeal overturned the High Court’s decision, ruling that a director’s duty to act in good faith includes, as a core fiduciary duty, a requirement that the director act honestly towards the company.

The test for honesty is not purely subjective but must also be assessed objectively (by the standards of ordinary decent people).