Parties within a chain of transactions may face liability for dishonesty and assistance, even if they do not have actual knowledge of fraud.

By Stuart Alford QC and Yasmina Vaziri

The recent judgment in Bilta (UK) Limited (in liquidation) & ors v. NatWest Markets plc & Anor [2020] EWHC 546 (Ch) provides a timely illustration of how the concepts of dishonesty and assistance may apply in a chain of transactions in which not all parties have actual knowledge of the fraud. In the case, the defendant bank and its subsidiary were found to be vicariously liable for dishonest assistance to fiduciary breaches by the directors of the insolvent claimant companies, despite not having actual knowledge of the directors’ fraud. The directors were found liable on account of their participation in trades executed by two employee traders in a carbon credit based carousel fraud scheme.