The court dismissed a claim on 5 October regarding its long-awaited judgment concerning how directors show duty to the interests of creditors, under the Companies Act 2006.

The previous judgment in the Court of Appeal in 2019 had ruled that the ‘creditors’ interests duty’ may be triggered in circumstances of actual insolvency, specifically when the director is aware that the company is likely to become insolvent.

On appeal, the Supreme Court confirmed that the creditors’ interests duty arises ‘when the directors know, or ought to know, that the company is insolvent or bordering on insolvency’.

The court reaffirmed the current position in law, stating that company directors are only required to begin prioritising creditors if there is a ‘probable’ chance that their company will fall into insolvency.

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