DIRECTORS, DON’T MAKE IT TOO EASY TO BE SERVED!03 Mar, 2021 - Other | by Grosvenor Law
Serving proceedings on an individual resident outside of the UK can sometimes be a complex and time-consuming task. For that reason, individuals resident abroad may think that they are somewhat protected from being served with English court proceedings. However, there is a little known (but well established) loop-hole that may, in fact, make it quite easy for some individuals to be served.
Directors of English companies will be well aware that they need to provide an address at which they can be served with documents. As that address will be publicly available on the Companies House website, many directors choose to provide an address other than their home address, for example, the registered office of the company itself. Some (or many) directors may be labouring under the misapprehension that such address can only be used for service of documents relating to company business. But they would be wrong.
In fact, by giving an address in England and Wales, directors are making it much easier for claimants to serve court proceedings on them, even in respect of matters wholly unconnected to the company.
Section 1140 of the Companies Act 2006 provides that documents may be served on a director (or secretary) by sending it to their registered address. The “registered address” is “any address for the time being shown as a current address in relation to that person in the part of the register available for public inspection.”
Recent case law confirms that section 1140 allows for any documents to be served on a director at their registered address, even legal proceedings relating to private matters wholly unconnected to the company or its business. For directors who are ordinarily resident in England, this may not matter too much save that it does make it very easy for claimants to identify a service address and they need not to go to the trouble of trying to find a residential address. But for directors based overseas, it means that claimants can serve them with documents without jumping through all the hoops associated with serving outside of the jurisdiction (a process that can sometimes be off-putting).
It also does not matter if the service address is one that the director never (or rarely) attends and / or where the post is checked sporadically (a particular issue during the Covid-19 pandemic, when many people are working from home). As long as the documents were sent to the correct address by an acceptable method (such as first class post), that will constitute good service. Directors who do not check their post at this service address regularly could then end up in a situation where default judgment has been entered against them without them ever having been aware that proceedings were issued against them in the first place. And in such a scenario, the excuse that the director did not realise proceedings had been issued against them because they didn’t check the post will not be sufficient reason on its own for the court to set aside the default judgment.
While directors cannot get around the requirement to provide an address for service, they should think carefully about the address they do give. In particular, don’t give an address where the post is never checked (because you do not want the hassle of trying to have a judgment already entered set aside) and also, consider whether it is appropriate to provide an address for service out of the UK. And you never know, that extra service hurdle may just be enough to put a claimant off issuing proceedings or make them more amenable to negotiating a settlement to avoid litigation.
Michelle Quinn is a Partner at Grosvenor Law and specialises in commercial disputes and insolvency matters frequently advising corporates and high net worth individuals on a broad range of domestic and cross-border matters.