Last year Safeway issued proceedings against eight of its former executives for an indemnity in respect of a penalty and other costs to be imposed on Safeway for breaches of competition law. The eight defendants, all former directors or employees of Safeway, then sought to strike out the claim on the basis that Safeway was barred as a matter of public policy from seeking to pass on costs incurred as a result of the company’s own unlawful acts.
On 15 January 2010, the High Court ruled that Safeway had a real prospect of succeeding in its claim and ordered that the case proceed to trial. The eventual outcome of the trial will have significant implications for where the liability, and associated costs, of companies, their directors and officers, and insurers will ultimately lie.
Sarah Lee (partner), Bertrand Louveaux (partner)
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