Breaking Habits

This morning I arrived safely at Bank station at 8:49 for a meeting at 9.  There was only one problem.  I was due in Moorgate which I had happily sailed past a few minutes earlier!

I hadn’t fallen asleep.  I wasn’t drunk.  I hadn’t even been lost in e-mails, my thoughts, or the latest episode of Sons of Anarchy that the guy sitting next to me was watching.  I am so used to getting off at Bank that I’d completely forgotten that I was going to Moorgate this morning. My normal routine and habits had taken over my conscious thoughts.

I’m sure we’ve all done similar things.  Sailed past the motorway exit that you rarely use in favour of the normal one.  Picked up your usual bottle of wine on the way through the supermarket when you’d decided this morning you would stick to juice.  Forgotten to collect the kids when you agreed with your ex to swap days – no, perhaps that’s just him who did that!

Whatever your experiences, the chances are that at least once, you’ve done something you didn’t mean to do, because you are in the habit of doing something different.  You take certain things for granted and you go in to automatic pilot.

Yesterday I read about a recent case that emphasises just how dangerous that can be.   A company issued court proceedings when it shouldn’t have done.  I wouldn’t be surprised if they knew at the time of issuing that they were pushing their luck, but they relied on the well known legal premise that directors cannot be held personally liable for the company’s debts unless you can lift the veil of incorporation.  Lifting the veil is a very difficult and time consuming step to take, and so directors are in the habit of believing that so long as they don’t do anything really obviously wrong, for significant sums, they’ll be ok.

Unfortunately, where litigation is concerned, lifting the veil of incorporation isn’t the only option available to a Judge.  He can make a third party costs order.  This is where the court accepts that a third party has done something that brings them into the litigation.  I’ve seen it be applied to solicitors who have allowed cases/defences to continue even though they knew or should have realised that their client was lying. I’ve seen it be used against people who are not parties to the case, but have funded someone to enable them to proceed.  Now I’ve seen it be applied to directors, who allowed their company to bring an action that should never have been bought, perhaps as a bargaining tool.  If you were being pursued by a company that was of limited means, you may settle rather than fight on, even if you know you have a good defence, as no matter how likely to you are to succeed, it’s pointless if the other side is not going to be able to honour any costs order that is awarded to you.

If you are a director of a company, and want to know what are good habits, and what are bad habits, drop me a line at stephanie@kleymansolicitors.com and we can meet for a coffee and a chat about how not to miss stations, deadlines and warning signs!

Kleyman & Co Solicitors.  The full service law firm.  Helping you mind the gap