UK Law and Practice Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
discussed in detail in 1.3 Claims Against Par- ties Who Assist or Facilitate Fraudulent Acts . Specific insolvency claims “wrongful trading” and “transaction at undervalue” Additionally, there are specific claims that arise in an insolvency setting. In particular, English insolvency law provides for a specific claim available to liquidators of “wrongful trading” , which occurs where a company’s director(s) continues to trade in circumstances where they know (or ought to have known) that there is no reasonable prospect of the company avoiding insolvency proceedings. A director who know - ingly fails to exercise due care may become per - sonally liable to the company or its creditors for the losses they cause. Steps may also be taken where a company enters into “transaction at undervalue” , whereby assets are gifted or sold to third parties at a price that is significantly below their actual value. If the company subsequently becomes insolvent, a court may order the reversal of any such trans - actions that took place in the two years prior to the insolvency. 1.2 Causes of Action After Receipt of a Bribe Civil Claim A civil law claim may be brought by a person who discovers that their agent or employee has been bribed or has received a secret commis - sion. In bringing such a claim, the claimant must show that: • a payment was made to the agent/employee of the briber’s counterparty; • the briber knew that the recipient was the agent/employee of the counterparty; and • the payment was not properly disclosed to the counterparty.
• a solicitor and their client; • a company director (including shadow direc - tor) and the company; • a financial adviser and the investors they are advising; • an agent and their principal; or • a business partner and their co-partner(s). Where such a relationship exists, the fiduciary must act with outright loyalty towards their prin - cipal. In broad terms, this means that they: • must act in good faith; • must not make a profit out of the relationship of trust; and • must not put themselves in a position where their duty may conflict with their own inter - ests. Unsurprisingly, fraudulent behaviour (such as misappropriation of assets) in the context of one of these relationships will amount to a breach of trust/breach of fiduciary duty. There are a number of remedies available for a claim of breach of trust or breach of fiduci - ary duty. Most commonly, the fiduciary will be required to compensate the principal for losses suffered, or to “account” for any losses and (potentially) profits made as a result of the breach. The principal may also be able to “fol- low” or “trace” specific trust property or pro - ceeds and assert an equitable interest over them (see 1.5 Proprietary Claims Against Property ).
Other Causes of Action Third-party involvement
English law also provides separate causes of action against third parties who assist or facili - tate fraudulent acts (eg, unlawful means con - spiracy and dishonest assistance). These are
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