In a decision handed down on Friday, 24 April 2026, the High Court re-defined the scope of unlawful means conspiracy, finding that a director can indeed conspire with their own ‘one-man company’ for the purpose of the economic tort.
In Lux Films Ltd v. Fowler [2026] EWHC 963 (KB), Sweeting J ruled that the criminal law principle, that a director cannot conspire with a company under his control, did not govern the tort of unlawful means conspiracy. This is believed to be the first time the point has been determined following full argument at trial.
B P Collins LLP’s Simon Carroll, dispute resolution partner; Kathryn Fielder, employment partner and Tom Bourke, employment solicitor, represented the successful Claimant, together with Counsel, Lucy Bone.
The claim arose following a breakdown in the relationship between the Claimant’s three directors and shareholders, and the subsequent misuse by Mr Fowler of the Claimant’s confidential information and his concealed diversion of clients and work to a third-party company controlled and run by him.
After obtaining injunctive relief when Mr Fowler’s activities were first discovered, which included advertising testimonials, clients, and work misattributed to Mr Fowler’s company, a claim was issued seeking inter alia damages, an account of profits, and restitutionary compensation for breaches of fiduciary and director duties, contractual and employment obligations, and for unlawful means conspiracy as between Mr Fowler and his company.
In response to the conspiracy allegation, the Defendants, relying on an interpretation consistent with the criminal law principle, argued that Mr Fowler’s company was simply his alter ego, such that no conspiracy could exist.
After a detailed analysis, the judge observed at [167] that the offence under criminal law required agreement “…between legally distinct persons capable of criminal liability…”, the essence of which was to do with, at [164] “…the agreement itself, not the causing of harm of loss” or at [165] “…with compensation for loss”, and held at [170] that “…the criminal law principle does not govern the position in civil conspiracy”.
Addressing the position in tort, Sweeting J held at [173] that: “The decisive question is whether there is evidence of concerted action between two legal persons, even if they are closely connected, rather than whether there are two independent psychological actors. Where a director acts in one capacity to procure unlawful conduct, and in another capacity causes the company to receive and exploit the fruits of that conduct, the requirement of combination is satisfied.”
This is an area where the law was unsettled. In AAH Pharmaceuticals Limited v Birdi [2011] EWHC 306 (QB), Coulson J indicated that “…a result that distinguished between the criminal and civil jurisdictions in such a radical way is, in principle, unattractive,” but said he would need to hear further argument before reaching a final view. Less than a year later, Gloster J in Barclays Pharmaceuticals Limited v Waypharm [2012] EWHC 306 (Comm) took the opposite view, adopting the Irish Supreme Court’s policy-driven reasoning in Taylor v Smyth [1991] IR 142, but also without hearing full argument. In Raja v McMillan [2021] EWCA Civ 1103, Nugee LJ in the Court of Appeal also declined to express a settled view, noting that there were arguments either way. Sweeting J’s decision brings helpful clarity to the law in circumstances where a director is the sole company controller.
If you have any questions about any matter raised in this article, or wish to discuss issues of this nature, please contact B P Collins LLP’s dispute resolution group on enquiries@bpcollins.co.uk or 01753 889995.
