A surprise judgement by the Cayman Islands Court of Appeal, exempting the former non-executive directors of a collapsed hedge fund from liability, could have significant implications for hedge fund directors.

Nigel Meeson, head of litigation and restructuring in the Cayman Islands office of law firm Conyers Dill & Pearman, said the judgement would make it "extremely difficult to find any professional service provider liable [for a hedge fund collapse] - either the administrator, or the auditor, or director."