Created Date:
13 May 2020
Image of Gorey Castle

Coronavirus (COVID-19): Reassurance for directors of Jersey companies

The Law Society of Jersey has issued guidance commenting on wrongful trading under Jersey law given the financial difficulties caused by the coronavirus (COVID-19) pandemic.

Today the Law Society of Jersey has issued this practice statement, which should give reassurance to directors of Jersey companies who may be worried about their personal liability for wrongful trading in the current situation.

The practice statement serves as a timely reminder that, under Jersey law:

  • a wrongful trading claim can only be made against a director if the relevant company becomes subject to formal insolvency proceedings; and
  • it is a defence to a claim of wrongful trading for a director to show that the director took reasonable steps to minimise losses to creditors from the point at which the director knew there was no prospect that (or was reckless as to whether) the company would avoid insolvency proceedings.

The statement also contains helpful guidance for directors on what may constitute “reasonable steps” and makes it clear that, provided a director acts responsibly and reasonably, they should not attract personal liability. For more information on this, see our 'Jersey Directors' duties in light of the coronavirus' briefing.

This is a pragmatic response from the Jersey legal profession which is consistent with the advice we have been giving to our clients to date. If you wish to discuss your business’s response to COVID-19, speak to your usual Carey Olsen contact or email [email protected]

Carey Olsen Jersey LLP is registered as a limited liability partnership in Jersey with registered number 80.

Please note that this briefing is only intended to provide a very general overview of the matters to which it relates. It is not intended as legal advice and should not be relied on as such. © Carey Olsen Jersey LLP 2023.