Tag Archives: Criminal

Supreme Court Makes Major Decision on Director Responsibility

The Supreme Court has handed down a potentially landmark decision in the case of Jetivia SA and another v Bilta (UK) Limited (in liquidation) and others [2015]. The ruling could have major implications in future cases where the directors of companies in liquidation face charges of fraud.

The defence mounted in this case, which the court unanimously rejected, would have seen two directors of an insolvent company rely on their own wrongdoing to escape responsibility and avoid paying damages. In order to do so, they cited the precedent set by a previous, very unpopular decision from the case of Stone & Rolls Limited v Moore Stephens.

In the case recently ruled upon by the Supreme Court, the two directors of defunct company Bilta were being sued for damages on behalf of that company by its liquidators. Acting in conjunction with others, whose responsibility is also established by the ruling, they are accused of neglecting their duties to the company as directors and deliberately engaging in fraudulent transactions through Bilta for personal gain, most of which involved the European Emissions Trading Scheme Allowances. Upon Bilta being forced to close down in 2009, the liquidators attempted to claim damages on Bilta’s behalf from the two former directors. Any compensation payments gained through the case would be used to help pay back those who were owed money by the company when it was forced to go into liquidation.

The two defendants and their accomplices attempted to mount an illegality defence. They claimed that because they had used the company to carry out their fraudulent transactions, Bilta was unable to make any claim against them. Because of their actions, they claimed, it was a criminal company and a tax fraud vehicle, and therefore had no right to damages. Had this defence been accepted, it would have meant that the very fact they were guilty of fraud meant that they could not be sued for their offences.

However, the Supreme Court rejected this defence unanimously, and this could prove an important decision for similar cases in the future. Where the unpopular ruling in the Stone & Rolls Limited v Moore Stephens case opened up the possibility of mounting such an illegality defence in similar cases, the more recent ruling may have closed this potential loophole.

The defence also claimed that section 213 of the Insolvency Act, under which the action against them was brought, did not apply extraterritorially and so was not valid for use in this case. The Supreme Court also ruled against this claim, and therefore established that Section 213 of this act can be used extraterritorially in future cases.

Lawyers Unite to Oppose Legal Aid Cuts


 There has been debate around the possibility of cuts to legal aid for some months, with many people opposing the impact these cuts could have on ordinary people in need of legal representation. Now, lawyers and legal groups with a professional interest in the area of legal aid have formed a new group to oppose the potential cuts.

The new group, known as the National Justice Committee, and it is made up of a number of member organisations. These include the London Criminal Courts Solicitors’ Association, Criminal Bar Association, Criminal Law Solicitors’ Association, Justice Alliance and the Criminal Law Solicitors’ Association. The Bar Council and the Law Society will also be in attendance, but in the capacity of observers rather than participators.

A statement was issued to announce the formation of this group. The statement said that the committee “notes the devastating effects of legal aid cuts and restrictions in social welfare law, family law and immigration law.”

The statement went on to say that the new committee “opposes all further legal aid cuts and proposals to weaken the ability of the ordinary citizen to challenge unlawful decision-making.” It suggested that if the cuts to legal aid go through, they “will diminish our social fabric by reducing access to justice.”

The group has also described the proposed cuts as “unnecessary and counter-productive.” It has claimed to be able to provide evidence in support of claims that these cuts would not ultimately result in savings, and that there were ways that savings could be achieved without making such cuts.

During the months that these issues have been under discussion, concerns have emerged over the sufficiency of legal aid even in its current form. For example, in the later part of 2013 it emerged that legal aid remains inaccessible to over 50% of domestic violence victims. Strict rules around requirements for certain forms of “qualifying evidence” prevent many victims from qualifying for legal aid. There are concerns this may lead to them being unable to seek legal assistance at all, and perhaps feeling unable to escape abusive relationships.

When such concerns are leading many to believe that legal aid should be rolled out to more people, concerns about the effects of cutting the available funds become even keener.

The new National Justice Committee now intends to set a date for a day of protest action, expected to take place sometime in late February or early March. There was previously a half-day of protest action held earlier this month.