Implied Indemnity When Acting As A Director Of A Client Company

A recent decision of the High Court in England should be carefully considered by corporate service providers in Jersey. In First Names (Jersey) Limited v IFG Group PLC [2017] EWHC 3014 (Comm) Knowles J held that there is an implied term in the contract of employment that an employee required to serve as a director of a client company, and acting in good faith, would be indemnified against costs, losses and liabilities incurred in the course of that directorship.

Although the case was heard in England, it specifically related to contracts of employment governed by Jersey law. Therefore the decision is likely to be highly persuasive if a similar issue arises before the Royal Court in Jersey and we anticipate this decision is likely to be followed to imply this term into contracts of employment here.