A judgment of Mr Justice Sweeting addresses a significant question in civil conspiracy law: can a sole director and his wholly-owned company be found to have conspired together? The answer, it appears, is yes.
The facts
This claim arose out of the breakdown of the relationship between the three directors and shareholders of Lux Films Ltd ("Lux"), a small UK media production company specialising in video content. Lux was incorporated in February 2016, and its three issued shares were always held in equal proportions by three individuals: Gareth Lowndes, Mark Woodhead and Andrew Fowler ("AF"). All three had worked together on a freelance basis for a large client, Herbalife, between 2008 and 2016.
The parties' respective roles within Lux were broadly delineated: Mr Lowndes focused on filming, Mr Woodhead on directing and production, and AF on video editing. Over time, AF became increasingly office-based and assumed primary responsibility for Lux's day-to-day administration, including liaising with clients, managing schedules, coordinating freelancers, overseeing post-production workflows, maintaining access to Lux's digital systems, and dealing with accountants and other external advisers.
As Lux's business developed, it moved beyond an informal, freelance-based operation and invested in physical premises, personnel, equipment and training. From February 2022, Mr Lowndes, Mr Woodhead and AF became full-time employees of Lux, each receiving a salary and pension contributions, consistent with Lux's evolution into a more structured and established business.
Relations between the directors deteriorated in early 2023. In March 2023 AF indicated that he wished to exit the business. Discussions between the parties continued over the ensuing months, including a threat from AF to launch an unfair prejudice petition, but did not result in any agreed exit or restructuring. AF then began to undertake work independently of Lux through Andrew Fowler Media Ltd ("AFML", the Second Defendant) whilst still remaining as a director, shareholder and employee of Lux.
AF is the sole director and shareholder of AFML, a company which trades as "Rotate Films". AFML operated in the same market as Lux and provided video production services to commercial clients.
Lux's case was that, while still occupying those positions, AF acted in breach of his duties to Lux. In particular, Lux alleged that AF diverted business opportunities away from Lux to AFML, using confidential information obtained by virtue of his position as director and employee. It was alleged that AFML serviced Lux's clients, advertised for work which Lux could have undertaken, and presented itself to the market in a way which drew on Lux's goodwill, including by using Lux's testimonials with Lux's name replaced.
The evidence of AF's conduct was damning. There was direct documentary evidence in which AF acknowledged, in terms, that diverting business away from Lux while he remained a director was improper. In a contemporaneous message, AF described his conduct in "taking business away from Lux" as "a bit naughty" in light of his status as a director, albeit adding that it might be "hard to prove". There were also texts from March 2023 in which AF referred to advice from his accountant to liquidate Lux and spoke of trying to "bag the lot" of Lux's clients as a result.
Interim injunctive relief was sought and granted, including an order to provide certain evidence. Evidence provided by AF showed that AFML had generated in excess of £450,000 plus VAT in gross revenue between February 2023 and September 2024 from work undertaken for a number of businesses. Shortly thereafter, AF gave seven days' notice of resignation as a director and employee of Lux, effective from 26 September 2024.
A fly in the ointment occurred mere days before trial commenced. On 18 March 2026 AFML entered voluntary liquidation, and on 20 March 2026 a bankruptcy order was made against AF. No advance notice of the impending insolvencies was given to Lux, and Lux first learned of them on or about 16 March 2026, at a time when trial preparation was substantially complete and significant costs had been incurred. The Court nonetheless proceeded to trial, concluding that there was a clear advantage to the insolvency proceedings if the court resolved the issue of the Defendants' liabilities, and that it was in the interests of justice and in accordance with the overriding objective for the trial to proceed. AF appeared to have proceeded on the mistaken assumption that insolvency would result in an automatic stay of proceedings.
The law of unlawful means conspiracy:
The cause of action and the key legal issue
The tort of unlawful means conspiracy requires: (i) a combination or agreement between two or more persons; (ii) concerted action pursuant to that combination; (iii) the use of unlawful means; and (iv) loss caused to the claimant, with the requisite intention to injure.
AFML argued that it could not conspire with AF because a sole director and his company cannot form a conspiracy. The central legal issue was, therefore, whether, as a matter of law, a sole director and shareholder can conspire with his own company, or whether such a claim is barred on the basis that there cannot be a combination or agreement between legally distinct actors who are effectively the same mind.
The criminal law analogy (and why it fails in civil proceedings)
AFML's argument drew support by analogy from criminal conspiracy, where it has been held that a sole controller and his company cannot conspire because conspiracy requires an agreement between two independent minds. The rationale is that there can be no agreement to conspire where the conspirators are essentially the same person and the same mind.
The Criminal Law Act 1977 re-codified and rationalised the law of criminal conspiracy. Section 1 creates a statutory offence and 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, will necessarily amount to or involve the commission of a criminal offence. As Sweeting J observed, "the essence of the offence under the [Criminal Law Act 1977] is therefore the agreement itself, not the causing of harm or loss. Criminal liability attaches even if the agreed offence is never committed." The Act is "not concerned with compensation for loss". The criminal statute did not codify the civil law, and was applied against very different procedural and evidential rules.
The controversy in the authorities
There has been considerable controversy in cases considering the civil tort of unlawful means conspiracy. Several first instance authorities have established that a director can conspire with a company that is his alter ego; however, those cases have concerned companies with two or more directors. The position has been unclear where the director is the sole controller, with recent decisions going both ways and the leading textbooks expressing different views.
In AAH Pharmaceuticals v Birdi [2011] EWHC 1625 (QB), Coulson J emphasised the policy goal of consistency, stating by reference to the clear position under criminal law: "a result that distinguishes between the criminal and civil jurisdictions in such a radical way is, in principle, unattractive". Less than a year later, in Barclay Pharmaceuticals Ltd v Waypharm LP [2012] EWHC 306 (Comm), Gloster J took the opposite view (albeit without having heard argument on the point).
The issue reached the Court of Appeal in Raja v McMillan [2021] EWCA Civ 1103, where Nugee LJ cited McDonnell and said at [56]: "Although a criminal case, it is not obvious why the same should not be true in a civil conspiracy". Nugee LJ went on to note that "there are arguments the other way" and declined to express a concluded view, leaving the point for determination at trial. A different policy approach had been taken in the Irish decision of Taylor v Smyth [1991] IR 142, where the Irish Supreme Court had no hesitation in holding that a director and sole controller could conspire with his company. The court found no reason in principle why a sole controller should obtain immunity from suit, and distinguished McDonnell on the simple basis that it was a criminal case.
It was against that backdrop that Sweeting J was required, for the first time following argument at trial, to determine the point.
The Judge's decision in this case
Sweeting J held clearly that the criminal law principle does not govern the position in civil conspiracy. The tort is concerned with the practical reality of concerted action by separate legal persons causing harm. Turning to the position in tort, the focus is on the damage caused by concerted action using unlawful means, not on the policy reasons which underlie the criminalisation of an agreement.
The authorities support the proposition that, in civil law, a company and its controlling individual may be capable of conspiring where the company is used as the instrument through which unlawful conduct is carried out. The corporate form cannot be deployed as a shield to defeat liability where it is itself part of the wrongful combination.
At [173], Sweeting J held: "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".
On the facts, the court had no difficulty. AF, acting in his personal capacity as director and employee of Lux, misused Lux's confidential information, breached his fiduciary and statutory duties, and diverted business opportunities away from Lux. AFML, acting through AF in his capacity as its director, entered into contracts with diverted clients, invoiced for and received payment, and exploited Lux's confidential information, goodwill and work product in the course of its business.
These were not merely unilateral acts. They were sequential and interlocking steps in a single scheme, whereby AF's breaches of duty supplied the unlawful means and AFML's conduct realised the gain. The loss to Lux was the inevitable counterpart of that gain. The fact that AF controlled AFML did not negate the existence of a combination; on the contrary, it explained how the combination operated effectively.
The "intention to injure" requirement
AFML contended that there was no intention to injure Lux. That submission was unsustainable. In an unlawful means conspiracy, an intention to injure is established where the defendants knew that injury to the claimant was the inevitable consequence of the course of conduct pursued for their own benefit. It is not necessary that harm to the claimant be the predominant purpose.
AFML's gain from the diverted business was inseparable from Lux's loss of that same business and opportunity. AFML could not obtain the benefit without Lux being deprived of it. The requisite intention was therefore made out.
The corporate veil point
AFML had also relied on the principle of individual corporate identity, pleading that AF's knowledge and conduct could not automatically be attributed to AFML. However, while the principle of separate corporate personality is well established, it did not assist AFML on the facts. AF was the sole director and shareholder of AFML and its directing mind. Where a company acts through a sole controlling individual who knowingly causes it to receive and exploit benefits derived from breaches of duty, that knowledge is properly attributable to the company. AFML could not shelter behind corporate form to avoid liability.
Conclusion
The court upheld the conspiracy claim, along with claims of breach of fiduciary duty and knowing receipt. The legal issue raised by AFML (that a sole director and his company cannot conspire together) does not defeat the conspiracy claim as a matter of civil law. Where a company is used as the vehicle through which unlawful acts are implemented and profits realised, and where those acts cause injury to a third party, the elements of unlawful means conspiracy are capable of being satisfied notwithstanding the unity of control.
Lux Films Ltd v Fowler & Another [2026] EWHC 963 (KB) is a significant decision for practitioners advising clients in director misconduct and breach of fiduciary duty disputes. It brings clarity on a point which has long been unsettled. As well as confirming that a sole controller will not be exempt from claims in tort, Sweeting J has also given important redefinition to the principles underpinning the tort: his judgment demonstrates that the civil and criminal branches of the law address different policy objectives and different mischiefs, and that the civil tort of unlawful means conspiracy is conceptually distinct from conspiracy under the Criminal Law Act 1977. It confirms that the use of a corporate vehicle to profit from misconduct is no safe harbour, and that the civil law of conspiracy will reach those who collude with their own companies to injure others, even where both the individual and the company are, in substance, one and the same mind.