Companies Act 2014 section 1147

Civil liability of directors and experts

Section 1147 establishes the civil liability of directors and experts to compensate shareholders for losses caused by misconduct or untrue statements in connection with a merger, and sets out the defences available to those directors and experts.

• Shareholders of merging companies can claim compensation from directors or experts whose misconduct in preparing or implementing a merger causes them loss or damage.
• Liability also arises where untrue statements appear in key merger documents, including the common draft terms, the directors' explanatory report, the expert's report, or the merger financial statement.
• Directors and experts can defend themselves by showing they were unaware of the document's issue and promptly notified shareholders, or that they had reasonable grounds to believe the statements were true.
• These civil liability provisions do not apply to mergers by absorption.