EMPLOYEES HELD PERSONALLY LIABLE FOR MISLEADING AND DECEPTIVE CONDUCT

Author: Valentina Misevska

Publish Date: January 16, 2007

On 13 December 2006, the High Court unanimously held that two employees of a business were personally liable for misleading and deceptive conduct due to incorrect advice given about the establishment of a business. They were subsequently found liable for damages incurred by a client who relied upon their advice, even though they were merely acting as employees.

Consequently;

Employers should: review their liability insurance and contracts regarding indemnities to ensure that relevant employees are sufficiently protected against such claims

Employees should: personally ensure that their contracts of employment provide adequate protection

Finally, employers should take appropriate steps to ensure that their business activities do not offend the Trade Practices Act 1974 (Cth) or Fair Trading Act 1987 (NSW) in relation to misleading and deceptive conduct. Employers should also know how to suitably monitor the activities of their employees.

Houghton v Arms [2006] HCA 59

For a detailed review of this case please click here to read our website article.

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