Civil Fraud Quarterly Round-Up: Q4 2024
Mary Young
This quarterly civil fraud update provides a summary of reported decisions handed down in the courts of England and Wales in the period of July - September 2025.
APP Fraud
A litigant in person’s claim against their bank for damages following payments made pursuant to an APP fraud was partially struck out and an unless order made that the particulars of claim be amended to properly plead the remaining parts of the claim in Barclay-Ross v Starling Bank Ltd. The Court agreed that it was at least arguable that the Defendant bank could owe a duty to take instructions to try to recover payments once fraud had been established.
Breach of Fiduciary Duty
In Pagden v Fry the Court considered the distinction between a liquidator and the firm they operated through. Liquidators could not limit their personal liability for breaches of duty on the basis that they held company assets on a statutory trust, and the obligations which arose by virtue of the creation of that trust could not be varied by the company in liquidation. However, the firm through which the liquidators operated could, by contract, limit its own liability, including for vicarious liability for breaches by the liquidators.
12345 Retail Group Ltd v Bubble City Ltd involved a settlement agreement entered into by two of the Defendants, with the effect of transferring business out of a Defendant company, against the company’s best interests. The settlement agreement had the effect of avoiding repayment of an investor’s loan and cutting the investor out of the business. Whilst the agreement was validly made, the clause relating to the transfer of the share was void as a result of the breach of fiduciary duty and was treated as deleted. The Claimant also had proprietary claims in dishonest assistance against the recipients of shares in the company as those shares had been received with knowledge of the transferor’s breach of fiduciary duty.
The Supreme Court considered issues of breach of fiduciary duty, dishonest assistance and equitable compensation in Stevens v Hotel Portfolio II UK Ltd. In particular, whether a dishonest assistant was liable to compensate a beneficiary for breach of trust where the trust in question constituted an unauthorised profit made in breach of fiduciary duty. The Supreme Court confirmed that in principle liability did arise in those circumstances, even where the beneficiary had suffered no loss and the dishonest assistant had not personally made any profit. The Supreme Court also considered issues of set-off, where gains and losses were made as a result of breaches of trust and concluded that set off would only be available where the breaches were part of one transaction.
Bribery
In the combined “motor finance” cases of Hopcraft v Close Brothers Ltd and others the Supreme Court confirmed that a fiduciary relationship was a necessary condition for civil liability for bribery to arise. In these particular cases the Supreme Court confirmed that car dealers did not owe fiduciary duties to their customers. As such, a failure to disclose commissions paid by lenders to those dealers when finance was arranged to enable the customers to buy cars did not give rise to claims in bribery.
Calculation of damages
Following judgment on liability for claims under FSMA, misrepresentation, deceit and breach of duty (in the claim formerly known as Autonomy Corporation and others v Lynch and another) the Court in ACL Netherlands BV v Sandelson was required to assess quantum. The Court took a broad-brush approach to the damages claimed under the FSMA claim: taking into account the parties’ expert evidence in order to determine a price per share which would have been paid in the counterfactual scenario advanced by the Claimants. The Court also considered the deceit and misrepresentation claims and determined that a counterfactual consistent with the FSMA claims would have to be adopted. Direct losses were awarded and the Court considered that USD was the currency which most closely reflected the loss to the Claimants.
Freezing Injunctions
Apollo XI Limited v Nexedge Markets Limited involved the discharge of a freezing injunction as a result of material non-disclosure and a failure of fair presentation. The Court reflected on the obligations of full and frank disclosure confirming the obligation on Applicants that material facts must be fairly and objectively presented and that obligation is breached where facts are buried in an exhibit or subject to unfair summary. The obligation applies to clients and legal advisors with the latter required to take steps to satisfy themselves that the position being put forward is supported by the available material. In this particular context, the provision of an incomplete transcript of more than four hours of recording apparently obtained in breach of confidence, with cherry-picking of particular sections presented without context provided a misleading picture and led to serious error.
The Court of Appeal considered issues of failures of full and frank disclosure in Astor Asset Management 3 Ltd v Salinas Pliego (discussed previously in my Civil Fraud Case update Q4 2024). The Appellants had originally sought the discharge of the freezing injunction on the return date, but had failed. The appeal was likewise refused: the Appellants' scatter-gun approach to complaints of failure of full and frank disclosure was criticised by the Court of Appeal. The Court of Appeal also drew a distinction between the assessment of a party’s ability and its willingness to satisfy a claim made under a cross undertaking in damages.
In FW Aviation (Holdings) 1 Ltd v Vietjet Aviation Joint Stock Co the Court refused to make a post-judgment freezing injunction on the basis that there was no evidence of a risk of dissipation of assets. A dividend distribution, even one made after a judgment was obtained, was a decision taken in the ordinary course of business and did not indicate a risk of dissipation of assets.
The Court of Appeal in Gable Insurance AG v Dewsall considered whether it had been justified to make a freezing injunction against a Defendant wife where her husband had been accused of misappropriating funds. The Court of Appeal concluded that the injunction was justified where the ownership of their combined assets was not clear. In particular the Defendant wife was prevented from using the proceeds of sale of a certain property to pay her legal and living expenses where there was a proprietary claim against those proceeds.
The Court of Appeal revisited the Derby v Weldon principle that the Court should not resolve disputed issues of fact on an interim basis in Mold Investments Ltd v Holloway. The Court of Appeal concluded that the Derby v Weldon principle was not an absolute rule. Nonetheless, it concluded that an application to set aside a freezing injunction should be heard at trial because the issues significantly overlapped with the substantive claim and the set aside hearing would take five days and involve multiple experts and witnesses of fact. Listing the set aside hearing separately would involve increased cost, be less efficient and increase the risk of procedural unfairness.
The Court refused to discharge a freezing injunction which had been in place for eight years in Nicholas v Jeffery. However, the freezing injunction was only continued on terms intended to bring the matter to trial: the Claimant was ordered to file and serve evidence explaining the delay in prosecution of the claim. Following any responsive evidence, the application to discharge would be restored.
The Commercial Court granted a freezing injunction under s.44 Arbitration Act 1996 to support LMAA arbitral proceedings in Universal Africa Lines BV v Knidos Shipping Corporation. This injunction was made in circumstances in which the LMAA rules do not allow an LMAA tribunal to grant such relief.
Misappropriation
JSC Commercial Bank Privatbank v Kolomoisky (discussed in my civil fraud cases updates of Q2 2018, Q4 2018, Q1 2021 and Q3 2021) involved the question of whether controlling shareholders of an insolvent Ukrainian bank were liable for misappropriation of funds. The Court found that they had set up a complex scheme of sham loans to conceal transfers out of Ukraine. As members of the board, this involved breach of fiduciary duty which constituted unlawful conduct. Claims in unjust enrichment were subject to the law of Ukraine because of the close connection and the fact of the fraud being set up to get around Ukrainian currency controls.
About the author
Mary Young is a Partner in the Dispute Resolution team. Her practice covers a wide range of areas but Mary’s particular interests and expertise lie in civil fraud and asset tracing as well as claims against professionals in negligence, breach of fiduciary duty and breach of trust.
Latest blogs & news
When does tax litigation cross the line? Indemnity costs outcome in the First-tier Tax Tribunal
Costs in tax litigation often catch even experienced advisors off guard. Unlike other areas of civil litigation, where costs consequences are ever-present and a continuous strategic consideration, proceedings before the First-tier Tax Tribunal (Tax Chamber) (“FTT”) are often approached with less emphasis on potential costs exposure.
Managing reputation in tax disputes
Privacy and confidentiality in tax cases have always been important, particularly where the taxpayer is someone in the public eye. Whilst a tax enquiry, or indeed litigation, does not mean that the taxpayer has ‘done something wrong’, there are certain negative inferences made by the public and media which could impact future opportunities for the individual or corporate involved.
Court of Appeal confirms strict approach to late tax appeals: What taxpayers need to know
One of the benefits of an appeal before the First-tier Tax Tribunal (“the Tribunal”) is that it is seen as less formal than an appeal in the Higher Courts. However, the Court of Appeal's recent ruling in HMRC v Medpro Healthcare [2026] is a reminder in case it was needed that deadlines matter in tax disputes and securing permission for a late appeal is not guaranteed.
No time limit on shareholders’ rights to petition for unfair prejudice
Section 994 of the Companies Act 2006 provides one of the most important protections available for shareholders - allowing a shareholder to apply to the court by petition for relief where “the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself),…”. These claims are often termed as “corporate divorce”.
The Olympic Games: Swift justice through the CAS Ad Hoc Division
The 2026 Winter Olympic Games in Italy are in full swing, showcasing athletic excellence on the world stage. At the time of writing, British hopes remain high despite some agonisingly close finishes, with Kirsty Muir, Mia Brookes, Jen Dodds and Bruce Mouat all delivering thrilling performances that placed them just outside the medals.
2025 in review: International arbitration
2025 was a notable year for arbitration in England & Wales, marked by legislative change, technological advances, and significant judicial developments that continue to shape the arbitration landscape.
2025 in review: Trust and estate disputes
2025 produced many interesting decisions in trust and estate disputes in the courts of England & Wales. We consider just a few of those key decisions below, which illustrate that the outcome in cases of this nature remains highly dependent on the particular facts of the case and available evidence.
Data protection v defamation as a means to protect reputation – where are we now and what can we expect in 2026?
There has been a trend in recent years of seeking to use data protection claims as a means of obtaining redress for reputational harm, which would traditionally have been sought through defamation proceedings.
Civil Fraud Quarterly Round-Up: Q4 2025
This quarterly civil fraud update provides a summary of reported decisions handed down in the courts of England and Wales in the period of October - December 2025.
2025 in review: Under construction - Tax investigations
In Rachel Reeve’s Budget on 26 November 2025, the Chancellor set out plans, among other things a to tackle fraud within the Construction Industry Scheme (“CIS”) and announced a technical consultation “aimed at simplifying and improving the administration of the scheme”.
Under construction: Tax investigations
In Rachel Reeve’s Budget on 26 November 2025, the Chancellor set out plans, among other things a to tackle fraud within the Construction Industry Scheme (“CIS”) and announced a technical consultation “aimed at simplifying and improving the administration of the scheme”.
No more deemed fulfilment: The Supreme Court decision in King Crude Carriers SA v Ridgebury November LLC
The recent Supreme Court judgment in King Crude Carriers SA and others v Ridgebury November LLC marks a significant development in English contract law.
The decision arose from an appeal against an arbitration award and addresses the fundamental question of whether the so called “deemed fulfilment” principle established by the 1881 Scottish Appeal case of Mackay v Dick exists in English Law.
2025 in Review: Civil fraud
In 2025, two High Court rulings, Apollo XI Ltd v Nexedge Markets Ltd and J&J Snack Foods Corp & ICEE Corp v Ralph Peters & Sons Ltd highlighted the strict nature of the duty of full and frank disclosure in without notice applications.
In both cases, the court discharged freezing injunctions after finding that the applicants had failed to meet the requisite standard of candour and fair presentation. These decisions serve as a clear reminder that when seeking urgent relief without notifying the other party, applicants must present all material facts - including those that may undermine their case, and ensure the court receives a balanced and accurate account.
“But you gave it to me” – Is there a way to ungive a gift?
We sometimes receive enquiries from people asking whether it is possible to challenge a gift which has been made previously.
Of course, giving someone a ‘lifetime gift’ (i.e. where money or assets are given away during a person’s lifetime) can be an efficient estate planning mechanism but, may be subject to challenge if the donor lacked the capacity to make an informed choice or, has been unduly influenced into making a gift.
We usually see this within the scope of a gift of money or a property, but similar principals apply to collectables and other chattels.
Victims of Fraud Series Part 4: Tracing issues in crypto assets cases
Claims involving digital assets (including crypto assets) have become relatively common in the English Courts over the last five years and, as a result, the main areas of disagreement between the parties to those disputes are starting to emerge. A major theme is the methodology that should be applied to the tracing and following of digital assets.
It was all a sham
Assets are typically placed in a trust for legitimate purposes, such as safeguarding wealth for future generations. However, arguments that a trust is in fact a “sham” created to hide the true ownership of assets often arise in the context of divorce litigation, bankruptcy/insolvency where a creditor seeks to argue that a trust is a pretence seeking to shield assets from creditors, or in estate disputes, where beneficiaries look to bring assets of the deceased back into an estate.
Victims of Fraud Series Part 3: “What can I do if the fraudster has disappeared?” - Persons Unknown Injunctions
Where the identity of a person or group of people responsible for a fraud is not known, the courts have recognised that it may be appropriate in certain circumstances to allow a claimant to issue proceedings and obtain an injunction (both interim and final) against such individuals. These injunctions are referred to as “persons unknown injunctions” and they have become increasingly prominent in recent years.
Landmark High Court ruling confirms availability of civil remedies for criminally sanctioned Companies Act breaches
Kingsley Napley is pleased to have acted for the successful claimants in proceedings before the High Court. The decision addresses a long-standing uncertainty in company law: if a provision of the Companies Act 2006 (“CA 06”) carries a criminal penalty for breach, does that mean no civil remedy is available? The court’s ruling sheds light on how such provisions should be understood and what consequences companies and directors may face when compliance falls short.
Victims of Fraud Series Part 2: Using information orders to identify a fraudster and trace assets
One of the most alarming aspects of falling victim to fraud is knowing where to start. It is very common for a victim to know almost nothing about what has happened, except for the fact that they have been scammed and the assets have gone. However, there are options available even if you don’t know the identity of the fraudster and the assets have, apparently, disappeared.
Travelex liquidation: Court appoints additional conflict liquidators
In a judgment handed down today, the Court agreed to appoint two additional conflict liquidators from Grant Thornton in the Travelex liquidation following an application made by Kingsley Napley’s client Rawbank S.A. (“Rawbank”).
Rawbank is the largest bank in the Democratic Republic of the Congo (“DRC”) and is an unsecured creditor of Travelex Bank Notes Ltd (“Travelex”) (part of the Travelex group of companies) for over £48m.
Share insightLinkedIn X Facebook Email to a friend Print