Directors’ Apparent Authority

Newcastle International Airport Limited v Eversheds LLP 2012 EWHC648

This was a negligence case concerning solicitors Eversheds who accepted instructions from a director to draft a service contract that awarded him a substantial bonus. The court held that the solicitors were not negligent in accepting his instructions even though they knew that his remuneration had to be determined by the remuneration committee of the company. The director had had apparent authority to instruct Eversheds who were entitled to rely on this holding out. The non-executive director who chaired the remuneration committee had as a matter of choice left all the contact between the airport and Eversheds to the directors.