The short answer to this question is “Yes, but only in certain circumstances”.
It has long been established that, in law, a company and its directors are different legal entities. They are different people, and you choose the people with whom you enter into contracts. So, if you have a contract with a company, you might (for example) want separate guarantees from the directors, so as to establish a direct contractual relationship with them, if you want to hold them liable.
Director as “Joint Tortfeasor”?
There is, however, an interesting line of cases in which it has been held that a director may be liable, together with the company, as a “joint tortfeasor”, a joint wrongdoer – perhaps by procuring or inducing a breach of contract by the company, or by getting the company to overcharge a customer.
The argument goes like this. An agent who commits a tort on behalf of his principal, and the principal himself, are “joint tortfeasors”. It is much the same sort of argument as where an employee does something wrong, and commits a tort, in the course of his employment: both he and his employer are liable as joint tortfeasors for the same damage.
Taking employment law as an example, it was held in Catanzano v Studio London Ltd UKEAT/0487/11/DM (7 March 2012) that a senior manager and a general manager of the company were liable, as joint tortfeasors, together with the company, as a result of their treatment of an employee who successfully pursued a claim for unfair dismissal and sex discrimination against them, and their employer.
Looking to company law, the basis for liability is demonstrated where a company director “is sufficiently bound up in [the company’s] acts” to make him personally liable as a joint tortfeasor, together with the company. In Contex Drouzhba v Wiseman [2006] EWHC 2708 (QB) [1], for example, the defendant director was, at all times, the active director responsible for the company’s operations. He procured that his company should make false representations as to its own credit, whilst knowing that the company was unable to repay its debts. In those circumstances, it was found that he had committed acts amounting to deceit. Accordingly, he was held to be personally liable to the claimant, as a joint tortfeasor.
The position of a director who is liable as a result of becoming “bound up” in the company’s acts is neatly summed up in one of the text books, which makes it clear that, “this will certainly occur where the wrongful acts complained of arise from a director’s participation in a manner that goes beyond the mere exercise of his power of control through the constitutional organs of the company. An example is where he facilitates the breach of a design right with a view to enabling a breach of that right to occur”[2]. Breach of a design right is one example. A director getting the company to make dishonest statements is another. There is no immediate difference, in principle, where a director gets the company to overcharge a customer, under a contract, for sums that are not properly due to the company.
Where somebody (a director) instigates another (a company, in our example) to commit a tort (a civil wrong), they may be liable as joint tortfeasors. The same is true if they have a common design in committing a tort, and take steps in carrying out the wrongful acts. How to you prove a “common design” to do something? While a common design would normally be expressly communicated between the principal and the accessory, it can be inferred where the director makes a more than minimal contribution to the commission of a tort by the company.
Conclusion
If you have a contract with a company, and no guarantee from any third party, the starting point is, of course, to look at the claims against that company.
There may, however, be claims that could properly be made against other people as well, such as a director, if s/he has been involved in any wrongdoing by the company - in a manner that goes beyond the mere exercise of his or her power of control through the constitutional organs of the company.
[1] See, also, as examples, Koninklijke Philips Electronics NV v Princo Digital Disc GmbH [2003] EWHC 2588 (Pat); [2004]; and Global Crossing Ltd v Global Crossing Ltd [2006] EWHC 2043 (Ch).
[2] Clerk & Lindsell Societa Esplosivi Industriali SpA v Ordnance Technologies (UK) Ltd [2007] EWHC 2875 (Ch)