The wide-ranging nature of the law of agency can be seen in the recent High Court case of Hipgnosis Music v Mercuriadis and others [2026] EWHC 1500. Mercuriadis had been a director of the claimant company and during this period, he and the company had considered the idea of buying the rights to published music in order to create catalogues so to earn the royalties flowing from those rights. For various reasons the company did nothing of substance with the idea and Mr Mercuriadis incorporated new companies (the other defendants in the action) with a view to exploiting the idea, which he did with some success. The remaining directors and shareholders of Hipgnosis accused Mr. Mercuriadis of acting in conflict of interest, of stealing a “maturing business opportunity” and generally acting in bad faith. They sued his other companies as being the knowing beneficiaries of Mercuriadis’ breaches. They failed on all counts, essentially because the business was just an idea at the time that Mercuriadis was a director of the claimant.
Why is this relevant to the law of agency ? Directors are the ultimate agents. They can only act with the authority of their principals-the company which they represent as directors. As such they have duties to the company arising in the common law from the law of agency and as set out in sections 170-175 of The Companies Act. The case shows the reach of this area of law into most areas of commercial life.