Directors' fear of derivative liability and occupational health and safety laws

Abstract

The question of when directors should bear personal liability for their role in the conduct of a corporation has always been controversial. Significantly,however, it is now clear that directors themselves perceive that this risk of personal liability is having a profound negative effect on both their desire to act in the role and the performance of their companies. While the risk takes various forms, directors have identified that they are most fearful of derivative liability such as is present in occupational health and safety laws. The purpose of this article is to review this particular area of concern and evaluate this perception against prosecutions and an analysis of the relevant cases.