Directing Minds and Agents: An Essay on Fraud and Attribution

摘要

In deciding Moore Stephens v Stone & Rolls by the narrowest of margins, their Lordships had fundamental differences on principles of attribution in corporate law. The facts before the House of Lords were that the sole directing mind of a company used the company as a vehicle for defrauding certain banks. The fraud was discovered and both the company and the directing mind were successfully sued for deceit by the principal victims (a bank). Moore Stephens were the company's auditors. The auditors accepted for the sake of argument that they were in breach of their duty to the company. They also accepted that, but for their breach, the fraud would have ended earlier. The company (now in liquidation) sought to recover its losses from the auditors. The auditors contended that the claim could not succeed because it was founded on the company's fraud and was barred by the maxim of ex turpi causa non oritur actio?