Attributing a fiduciary’s illegality to his principal – further guidance from the Supreme Court

On 3 November 2021, the Supreme Court handed down its judgment in Aquila Advisory Ltd v Crown Prosecution Service [2021] UKSC 49, holding that a company’s proprietary claim for breach of fiduciary duty against its former directors could be asserted in priority to a confiscation order obtained by the Crown Prosecution Service against those former directors following their criminal conviction. In so doing, the Supreme Court has re-affirmed the principles which limit attribution of a fiduciary’s illegality to the fiduciary’s principal. However, a curious feature of the case is that (at first glance) the principal was permitted to profit from the fiduciary’s illegality, in circumstances where the principal ostensibly suffered no direct financial loss.