High Court Finds Agreement Between A Company And Its Sole Director May Form Basis For Unlawful Means Conspiracy

In a recent decision, the High Court held that a sole director and the company he controlled could together be liable for the tort of unlawful means conspiracy: LUX Films Ltd v Fowler & Anor [2026] EWHC 963 (KB).

The decision shows that, for the purposes of the tort of unlawful means conspiracy, the requirements for a combination or agreement between two or more persons, and for “concerted action” between them, may be met where there are two separate legal persons even if one is an agent of the other. There is no requirement for the parties to be two separate psychological actors, as is the case in criminal law. 

Accordingly, where a sole director acts alongside their own company in a scheme to cause loss to another party, the director and the company may be liable for the tort of unlawful means conspiracy (provided the other elements of the tort are made out). 

The High Court’s decision is a welcome and commercially sensible clarification for claimants and creditors who may seek to rely on the tort in the context of allegations against sole director companies where the director is alleged to have acted unlawfully, particularly where they have orchestrated a scheme for their financial benefit in which the company plays a part. It shows that a fiduciary cannot evade liability through the insertion of a company under their control, but rather such a course can give rise to a further cause of action. 

This decision also contains helpful discussion of the underlying legal principles behind the tort of unlawful means conspiracy. The court noted that whereas criminal conspiracy is focussed on criminalising the agreement itself (regardless of whether it is acted upon), civil conspiracy is concerned with the damage caused by the relevant concerted action. The two therefore have different policy objectives, which may help guide further jurisprudence as to the scope of the tort.

Background

The first defendant (AF) was one of three directors and shareholders of the claimant (Lux), a UK media production company. At the same time, AF was the sole director and shareholder of the second defendant (AFML), a company operating in the same media production industry as Lux. 

Relations between AF and his fellow directors and shareholders deteriorated. It was alleged that, while he remained a director, shareholder, and employee of Lux, AF diverted business opportunities away from Lux to AFML, using Lux's confidential information, and that AFML serviced clients of Lux.

Lux alleged that AF was therefore in breach of fiduciary duties, statutory directors’ duties, contractual and implied duties of good faith and fidelity and the duty against the misuse of confidential information, and that AFML was liable for knowing receipt of property and benefits derived from AF’s breaches of fiduciary duty. 

However, this blog post focuses on Lux's claim against both defendants for unlawful means conspiracy. The tort of unlawful means conspiracy requires:

1. a combination or agreement between two or more persons;
2. concerted action pursuant to that combination;
3. the use of unlawful means; and
4. loss caused to the claimant, with the requisite intention to injure.

The defendants raised multiple defences, including the proposition that a company and its sole director cannot form a conspiracy. The central issue for the court to consider was whether there was a combination or agreement between two or more persons, notwithstanding the unity of control of AF and AFML. 

Decision

The High Court (Sweeting J) found that AF was in breach of duty and had misused Lux’s confidential information and resources, and that AFML was liable as a knowing recipient of property and advantages derived from the breaches of fiduciary duty.

The court also found that the unlawful means conspiracy claim was made out. It was satisfied that AF and AFML had acted pursuant to a common design whereby AF would misuse his position, confidential information and access to Lux’s resources to divert Lux’s clients and business opportunities to AFML. The loss to Lux was the inevitable consequence of the gain to AFML. 

As for the central issue of whether AF and AFML could conspire together, despite AF being sole director and controlling mind of AFML, the court rejected the defendants' submission that there could be no liability for conspiracy in these circumstances. 

In the criminal conspiracy context, Sweeting J noted, there is settled authority that a company and its sole controller cannot conspire because conspiracy requires an agreement between two independent minds (R v McDonnell [1966] 1 QB 233). Statute further supports the principle that criminal law conspiracy requires two separate psychological actors. Section 1(1) of the Criminal Law Act 1977 provides that a person is guilty of conspiracy if he agrees with one or more other persons that a course of conduct shall be pursued which, if carried out in accordance with their intentions, would (in summary) involve the commission of a criminal offence.

The judge considered whether the same principle applies to the tort of unlawful means conspiracy, or whether a company and its controlling director may be found to have acted in combination for those purposes. He referred to Raja v McMillan [2021] EWCA Civ 1103 where Nugee LJ noted, in the context of an application for summary judgment, that “it is not obvious that there is the requisite combination if all that happens is that a person uses his company to commit an unlawful act”. Nugee LJ did, however, note that there were arguments in the opposite direction, including that a contract can be made between company and its sole director, and a contract requires an agreement just as much as a conspiracy does. Nugee J also noted that there was Irish Supreme Court authority (Taylor v Smyth [1991] IR 142) which held that a director could be liable for conspiracy with two companies he controlled. 

In the present case, Sweeting J preferred the approach of Gloster J in Barclay Pharmaceutical v Waypharm [2012] EWHC 306 (Comm), following the reasoning of the Irish Supreme Court in Taylor v Smyth. In that case it was observed that there was no reason why the mere fact that an individual controlled a company should give them both immunity from suit for unlawful means conspiracy. McCarthy J commented that"it would be invidious … that the assets of a limited company should not be liable to answer for conspiracy where its assets had been augmented as a result of the action alleged to constitute the conspiracy”.

Sweeting J therefore held that the principle applicable in criminal law did not govern the position in the tort of unlawful means conspiracy. He noted that the two were conceptually and functionally distinct; criminal conspiracy criminalises the agreement itself, but the tort concerns itself with the damage caused. The key question to address for the purpose of the tort of unlawful means conspiracy is whether there is a concerted action between two legal persons rather than two separate psychological actors. 

On the facts, the court was satisfied that there was concerted action between the defendants. AF, in his personal capacity as a director and employee of Lux, has misused Lux’s confidential information and acted in breach of fiduciary and statutory duty, and diverted business opportunities away from Lux. AFML, acting through AF as director, had entered into contracts with diverted clients, invoiced and received payment and exploited Lux’s resources. The fact that AF controlled AFML did not negate the existence of an agreement between the two. Rather, it explained how the combination operated effectively.

The court also rejected AFML's contention that there was no intention to injure Lux. In an unlawful means conspiracy, an intention to injure is established if the defendants knew that injury to the claimant was the inevitable consequence of the conduct they pursued. Harm to the claimant need not be the predominant purpose. Here, AFML could not obtain the benefit sought without Lux being deprived of it, and so the requisite intention was made out.