Re Cardiff Savings Bank
Encyclopedia
Re Cardiff Savings Bank [1892] 2 Ch 100, often called the Marquess of Bute
's case is a UK company law case, concerning the duty of care owed by members of the board. It is old law, but is still often mentioned as an extreme example of to what extent a "subjective" duty of care (as opposed to an objective duty of care under the modern law, see Re D'Jan of London Ltd
and s.174 Companies Act 2006
) allowed directors to escape consequences of their negligence
.
The court held that there was no breach of duty of care for failing to attend bank meetings. It is unlikely in modern corporate law that this decision would be reached on the facts.
as an infant of six months was installed in 1848 on the board of directors
as "President" of the Cardiff Savings Bank, in effect inheriting the office from his father. The company was plunged into insolvency in 1886 when Lord Bute was 38 years old. He had been to a board meeting when he was 21, in 1868, and apparently signed the minutes. But he was generally ignorant of the company's affairs. The company went insolvent because the directors defrauded the company of large sums of money. The liquidator wanted Lord Bute to make a contribution for the losses.
John Crichton-Stuart, 3rd Marquess of Bute
John Patrick Crichton-Stuart, 3rd Marquess of Bute KT, KSG, KGCHS was a landed aristocrat, industrial magnate, antiquarian, scholar, philanthropist and architectural patron.-Early life:...
's case is a UK company law case, concerning the duty of care owed by members of the board. It is old law, but is still often mentioned as an extreme example of to what extent a "subjective" duty of care (as opposed to an objective duty of care under the modern law, see Re D'Jan of London Ltd
Re D'Jan of London Ltd
Re D’Jan of London Ltd [1994] 1 BCLC 561 is a leading English company law case, concerning a director's duty of care and skill, whose main precedent is now codified under s 174 of the Companies Act 2006...
and s.174 Companies Act 2006
Companies Act 2006
The Companies Act 2006 is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. It had the distinction of being the longest in British Parliamentary history: with 1,300 sections and covering nearly 700 pages, and containing 16 schedules but it has since...
) allowed directors to escape consequences of their negligence
Negligence
Negligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
.
The court held that there was no breach of duty of care for failing to attend bank meetings. It is unlikely in modern corporate law that this decision would be reached on the facts.
Facts
The Marquess of ButeJohn Crichton-Stuart, 3rd Marquess of Bute
John Patrick Crichton-Stuart, 3rd Marquess of Bute KT, KSG, KGCHS was a landed aristocrat, industrial magnate, antiquarian, scholar, philanthropist and architectural patron.-Early life:...
as an infant of six months was installed in 1848 on the board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
as "President" of the Cardiff Savings Bank, in effect inheriting the office from his father. The company was plunged into insolvency in 1886 when Lord Bute was 38 years old. He had been to a board meeting when he was 21, in 1868, and apparently signed the minutes. But he was generally ignorant of the company's affairs. The company went insolvent because the directors defrauded the company of large sums of money. The liquidator wanted Lord Bute to make a contribution for the losses.