Keymed (Medical & Industrial Equipment) Ltd v Hillman [2019] EWHC 485 (Ch)

Facts

  • The case concerned Keymed (Medical & Industrial Equipment) Ltd bringing a claim against its directors regarding their conduct during a company share repurchase.
  • The directors relied heavily on financial advisors when approving the share repurchase.
  • The directors failed to adequately review the details or form their own judgment on the transaction’s impact, depending primarily on external advice.
  • The High Court examined whether the directors met their legal duties when depending on expert input and the extent of their independent review obligations.

Issues

  1. Whether directors satisfy their legal duties by relying on advice from financial advisors without conducting their own critical evaluation.
  2. Whether directors can delegate decision-making responsibility to external specialists or must retain final judgment themselves.
  3. What practical steps directors must take to demonstrate compliance with the duty to act independently in the company’s interests.

Decision

  • The court held that directors are permitted to seek and use expert advice, especially where matters exceed their immediate knowledge.
  • However, directors must rigorously review all advice received, critically analyze its basis, question its conclusions, and ensure it aligns with the company’s interests.
  • The directors in this case failed in their duty by not sufficiently reviewing the financial advice or independently assessing the transaction’s consequences.
  • Decision-making cannot be delegated to advisors; directors retain ultimate responsibility.
  • Maintaining clear records of the data, advice, and reasoning supporting decisions is required.
  • Directors’ core duty is to act in the company’s interests, making decisions based on personal evaluation, not blindly on others’ advice.
  • While professional input may be necessary, directors must independently review all advice and cannot abdicate responsibility to specialists.
  • Proper use of advisors differs from improper delegation; only the former is consistent with legal obligations.
  • Directors are required to understand both the company’s operations and legal framework to assess advice appropriately.
  • Keeping detailed records of decisions and their rationales strengthens evidence of compliance with the duty of independent judgment.

Conclusion

Keymed (Medical & Industrial Equipment) Ltd v Hillman [2019] EWHC 485 (Ch) confirms that directors must exercise independent judgment and carefully evaluate all professional advice, clarifying the distinction between permissible reliance on advisors and impermissible abdication of decision-making responsibility.

The answers, solutions, explanations, and written content provided on this page represent PastPaperHero's interpretation of academic material and potential responses to given questions. These are not guaranteed to be the only correct or definitive answers or explanations. Alternative valid responses, interpretations, or approaches may exist. If you believe any content is incorrect, outdated, or could be improved, please get in touch with us and we will review and make necessary amendments if we deem it appropriate. As per our terms and conditions, PastPaperHero shall not be held liable or responsible for any consequences arising. This includes, but is not limited to, incorrect answers in assignments, exams, or any form of testing administered by educational institutions or examination boards, as well as any misunderstandings or misapplications of concepts explained in our written content. Users are responsible for verifying that the methods, procedures, and explanations presented align with those taught in their respective educational settings and with current academic standards. While we strive to provide high-quality, accurate, and up-to-date content, PastPaperHero does not guarantee the completeness or accuracy of our written explanations, nor any specific outcomes in academic understanding or testing, whether formal or informal.
No resources available.

Job & Test Prep on a Budget

Compare PastPaperHero's subscription offering to the wider market

PastPaperHero
Monthly Plan
$10
Assessment Day
One-time Fee
$20-39
Job Test Prep
One-time Fee
$90-350

Note the above prices are approximate and based on prices listed on the respective websites as of May 2025. Prices may vary based on location, currency exchange rates, and other factors.

Get unlimited access to thousands of practice questions, flashcards, and detailed explanations. Save over 90% compared to one-time courses while maintaining the flexibility to learn at your own pace.

All-in-one Learning Platform

Everything you need to master your assessments and job tests in one place

  • Comprehensive Content

    Access thousands of fully explained questions and cases across multiple subjects

  • Visual Learning

    Understand complex concepts with intuitive diagrams and flowcharts

  • Focused Practice

    Prepare for assessments with targeted practice materials and expert guidance

  • Personalized Learning

    Track your progress and focus on areas where you need improvement

  • Affordable Access

    Get quality educational resources at a fraction of traditional costs

Tell Us What You Think

Help us improve our resources by sharing your experience

Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

Saptarshi Chatterjee

Senior Associate at Trilegal