Peskin v. Anderson (2001) 1 BCLC 372

Directors usually owe duties only to the company. Shareholders cannot claim a general fiduciary duty from directors. A duty to specific shareholders may arise only in special facts where directors assume responsibility and shareholders rely on it.

• Main rule: Duty is to the company.
• Exception: Clear assumption of responsibility to certain members.
• Result here: No special duty was shown; the claim failed.

1. Do directors owe fiduciary duties to individual shareholders under English law?
2. When does an assumption of responsibility create a duty to members?

• Directors are fiduciaries of the company, not of members as a class.
• A shareholder-focused duty arises only from special facts—clear responsibility taken by directors and reliance by those members.

Think “company first”; look for facts that show a targeted duty to members.

Appeal dismissed. The Court of Appeal held that directors do not ordinarily owe fiduciary duties to shareholders. No special facts proved an assumed responsibility to the former members.

• Default: duty to company.
• No special duty established on the evidence.

Directors are not agents or trustees of shareholders. A fiduciary duty to members arises only from special circumstances showing a clear assumption of responsibility and reliance.

• Clarifies the boundary of directors’ duties.
• Guides claims by members—look for special facts, not general duty.
• Helps boards manage disclosure and communication risks.

• Duty runs to the company, not to members as a group.
• Member-focused duty needs assumption of responsibility + reliance.
• Non-disclosure to members is not automatically a breach.

Mnemonic: “COMPANY-FIRST EXCEPT”

1. COMPANY — fiduciary duty to the company.
2. FIRST — members come second by default.
3. EXCEPT — special facts = assumed responsibility to members.

Fiduciary Duty

A duty of loyalty and good faith owed by directors to the company.

Assumption of Responsibility

Directors take on a special role toward specific members, creating a duty.

Demutualisation

Changing from a mutual organisation to a company with shareholders.