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ARTICLE · 21 SEPTEMBER 2026

ML Covered - September 2026

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Directors face renewed scrutiny over their duties when companies trade at a loss, as the Court of Appeal clarifies the boundaries of fiduciary responsibility and the Insolvency Service reports record enforcement actions. Meanwhile, pension trustees grapple with complex affordability tests for inflation-linked increases, and employers confront stricter standards for part-time worker treatment and equal pay transparency.

United KingdomCorporate/Commercial Law
Rachael Healey
Rachael Healey
Matthew Watson
Matthew Watson
Zoe Melegari
Zoe Melegari
Andrew Oberholzer
Andrew Oberholzer
Charlotte Bray
Charlotte Bray

We are pleased to share our latest instalment of ML Covered, our monthly round-up of key events relevant to those dealing with Management Liability Policies covering D&O, EPL and PTL-type risks.

Court of Appeal revisits the duty that directors owe to prevent a company from trading at a loss

In Next Generation Holdings Ltd, Ambon Brokers Limited (Formerly AFL Insurance Brokers Limited) v Finch [2026], the Court of Appeal found that misappropriation of client money by directors did not cause a company's wider trading losses.

Background

AFL Insurance Brokers Limited (AFL) was an FCA-registered insurance broker, and was required to comply with Chapter 5 of the FCA’s Client Assets Sourcebook, to hold client money on trust in segregated client accounts and to perform periodic client money calculations. Alec Finch and Bob Finch (the Defendants) were directors of AFL. Between August 2011 and September 2017, they improperly caused AFL to draw money from the client money accounts to meet

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