High Court finds company director liable for misrepresentations made on behalf of the business

The High Court has found a father and son liable for deceit and unlawful means conspiracy in respect of misrepresentations made to secure lending for their family business. The son, a director of the borrowing entity, had sufficient knowledge to found liability for various misrepresentations made both by him and by the father, despite the court finding that his role in the family business was "to do as he was told" by the father: Njord Partners SMA-Seal LP v Astir Maritime Ltd [2024] EWHC 1682.

The decision demonstrates how a director (or any other individual) may be liable in respect of another party's misrepresentation on the basis of the "common design" principle of accessory liability in tort (as distinct from actively procuring the commission of a tort).  It applies the Supreme Court's recent restatement of that principle in Lifestyle Equities CV v Ahmed [2024] UKSC 17 (discussed here): a person may be jointly liable as an accessory to a tort as a result of assisting another to commit that tort, provided that the assistance is more than trivial and is given pursuant to a "common design" between the parties. The accessory must have had knowledge of the essential facts that made the act unlawful (though not necessarily knowledge that it was unlawful).  

The court rejected an alternative argument that a company director could be liable for the tort of deceit solely on the basis that they failed to correct a statement made by someone else on behalf of the company, which they knew to be false. That reflects the general principle that silence in itself will not give rise to liability for deceit unless there is some legal duty to speak.    

For more information see this post on our Civil Fraud and Asset Tracing Notes blog.