One-Man Conspiracy: Sole Directors Can Conspire with Their Own Companies

Lux Films Ltd v (1) Andrew Fowler; (2) Andrew Fowler Media Limited [2026] EWHC 963 (KB)

Summary

In a landmark ruling on unlawful means conspiracy, the High Court has held for the first time that a sole director and their company can legally conspire together. The Court rejected the argument that, where one person controls the company, there cannot be the required “combination” for a civil conspiracy claim.

Background

The Claimant is Lux Films Ltd (“Lux”), a media production company with three shareholders and statutory directors named Gareth Lowndes, Mark Woodhead and Andrew Fowler (“AF”).

The relationship between the directors broke down in early 2023. AF was also the sole director and shareholder of Andrew Fowler Media Ltd (AFML).

While still a director of Lux, AF diverted business opportunities from Lux to AFML. Lux alleged that he used confidential information he had obtained through his role as both director and employee.

Lux brought claims against AF and AFML for breach of fiduciary duties, breach of statutory director duties, breach of contractual and implied duties of good faith and fidelity, misuse of confidential information, and, most importantly for this article, unlawful means conspiracy.

Unlawful Means Conspiracy Issue

The unlawful means conspiracy claim focused on whether Fowler and Andrew Fowler Media Ltd had acted together to injure Lux by unlawful means, specifically by diverting Lux’s business opportunities to themselves.

For this type of civil conspiracy claim to succeed, there must be a combination or agreement between two or more people.

AFML argued that Lux’s claim failed at this first hurdle. Because AF was the sole director of AFML, it argued there could be no real “agreement” or “combination”. In other words, the alleged conspirators were effectively the same person.

Key Points

The Court’s decision turned on three key issues: the distinction between criminal and civil conspiracy, the separate legal personality of a company and the evidence of coordinated conduct between Fowler and AFML.

Criminal vs Civil Cases

In criminal cases such as R v McDonnell [1966] 1 QB 233, courts have held that a sole director and their company cannot conspire together, because conspiracy requires agreement between two independent minds. However, whether the same principle applies in civil cases has been debated across a number of authorities.

In Raja v McMillan [2021] EWCA Civ 1103, the Court of Appeal indicated that it was possible for a director to conspire with their own company because the law recognises the separate legal personality of companies. However, the Court acknowledged that the issue remained arguable and should ultimately be determined at trial.

Lux is the first case to squarely decide the issue at trial, which is what makes the decision significant.

At §171, the Judge explained that:

“Civil conspiracy is conceptually and functionally distinct from criminal conspiracy. Criminal conspiracy criminalises the agreement itself. Civil conspiracy, by contrast, is concerned with the damage caused by concerted action using unlawful means.”

The Court therefore concluded at §181 that the argument that “a sole director and his company cannot conspire together” did not defeat the unlawful means conspiracy claim as a matter of civil law.

The distinction exists because criminal and civil conspiracy serve different legal purposes.

Corporate Veil Cannot Be Used to Evade Liability

The Court also relied on the separate legal personality of companies. A company is a distinct legal person from its director, even where that director owns and controls the company.

That means, in a conspiracy claim against a sole director and their company, there can still be two legal persons involved. In this case, AF and AFML were treated as separate legal persons.

As the Judge explained at §172:

“The corporate form cannot be deployed as a shield to defeat liability where it is itself part of the wrongful combination.”

Clear Distinction of Capacities and Roles

The focus was therefore on “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” (§173).

In this case, AF acted in one capacity to procure the unlawful conduct and in another to cause AFML to receive and exploit the benefit of that conduct.

AF misused Lux’s confidential information, breached his fiduciary and statutory duties, and diverted business opportunities away from Lux. AFML then entered into contracts with the diverted clients, invoiced for and received payment, and used Lux’s confidential information, goodwill and work product in its own business.

As the Judge described it at §176:

“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 evidence therefore supported a clear distinction of roles, and the requirement for a combination was satisfied.

Practical Implications for Sole Directors

This decision carries clear warnings for sole directors, business owners and shareholders, particularly where side ventures, competing companies or diverted opportunities are involved.

Director’s liability for unlawful means conspiracy

The most significant legal development is the High Court’s clear confirmation that a director and the company they solely own and control can be capable of unlawful means conspiracy.

Competing with one’s own company is a serious fiduciary breach

Setting up and operating a directly competing business while still acting as a director and shareholder, and diverting clients or opportunities to that business, is a breach of fiduciary duty.

Unless there is express consent, directors must not compete with their own company.

The Court was also clear that Companies Act duties applied in full, regardless of how informally the business had been run or how the directors personally viewed their working relationship. The argument that “[e]veryone understood how we worked” carried no weight against statutory duties.

Cannot Hide Under a Corporate Entity

If you divert business through a personal company, claimants are unlikely to limit their claim to you as an individual. They may pursue the new company as well.

By pleading unlawful means conspiracy, claimants can bring both the director and the company into the litigation.

Profiting Companies Are Liable

Do not assume that your personal liability is reduced simply because the company, rather than you personally, received the payments.

If your company invoiced for and retained the profits from diverted work, a conspiracy claim can allow the Court to connect your actions with the company bank account.

This is particularly important in an account of profits or restitutionary claim, as company assets may be pursued to recover the commercial benefit gained.

Your Company Is Not a Shield

Operating through a sole director company will not protect you from personal liability if you engage in unlawful conduct.

This decision makes clear that the law may treat your company as an additional defendant with direct liability, rather than a protective barrier. You and your company may be held jointly and severally liable, meaning both could be responsible for the full amount of any judgment debt.

The decision also reinforces that courts will closely scrutinise founder-director exits and side projects. Courts are taking a harder line on opportunistic exits and “business divorces” carried out behind a company’s back.

The case is a clear reminder that loyalty and transparency are not optional, especially in small companies. Directors must act with integrity and in accordance with their statutory duties.