The former CEO of the Channel Islands Co-operative Society (CICS), Colin Macleod, has been awarded £3.5m in compensation and damages after Jersey’s Royal Court ruled the Co-op ”breached its duty of care”.
The court found the Co-op caused Macleod, who served as CEO from 2010 until his dismissal in 2020, psychiatric injury after several directors had engaged in “improper, commercially unacceptable and unconscionable” behaviour to remove him from office.
The Co-op’s conduct was described by Macleod’s lawyer as “a catastrophic failure in corporate governance”.
The judgement ruled three non-executive directors on the society’s remuneration committee had acted in “bad faith” over an extended period from early 2019 until Macleod’s dismissal in mid-2020.
The court said actions by the directors included “meeting and communicating in secret without maintaining records, failing to raise concerns through formal channels, requiring two expenses audits targeted at Mr Macleod, looking for evidence to use against him”.
The jurats also found there had been an attempt by one of the directors to step into Macleod’s role as CEO while he was still in it.
The court concluded there had been “deliberate targeting” to “force out” Macleod and that the psychiatric injury suffered by him was “caused by a breach of duty by the Co-op and was foreseeable”.
As a result, the court accepted Macleod’s claim for substantial past and future loss of earnings, awarding him £3,515,407 in compensation. Macleod was also awarded general damages of a further £40,000 for psychiatric injury, including £10,000 for loss of “congenial employment”.
Speaking after the verdict, Macleod said: “It is with a heavy heart that I reflect on the court’s findings. It is profoundly disappointing that, in the end, it took the Royal Court to enforce the values of the Channel Islands Co-operative Society.
“The board of directors had countless opportunities to fix this mess quietly and with dignity, but on each of those occasions, it chose not to. Members now must surely have a right to know why.”
However, a spokesperson for the Channel Islands Co-op said the judgement “will be challenged”.
“The Channel Islands Co-op acknowledges the judgement of the Royal Court but, with respect, it does not agree with the findings made by the Court,” they said.
“The Society has liaised closely with its insurers and legal advisers, and it is considered that there are substantial grounds for appeal. As the legal process remains live, it would be inappropriate to make any further comment at this time.”
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