Victory at the Supreme Court! Law on directors’ duties, accessory liability and account of profits restated in Lifestyle Equities CV and anor v Ahmed and anor [2024] UKSC 17

Peter Knox KC and Adam Riley are victorious in Supreme Court landmark appeal Lifestyle Equities CV and anor v Ahmed and anor [2024] UKSC 17.

On 15 May 2024, Lord Leggatt, delivering the lengthy and long-awaited unanimous judgment of the Supreme Court, restated the law on directors’ duties, accessory liability and reiterated the correct approach to the equitable remedy of an account of profits.

In summary, the Supreme Court:

• Upheld the Appellants’ appeal and dismissed the Respondents’ cross-appeal;
• Reasoned that there is no general principle of English law which exempts directors, agents or employees from the ordinary principles of tort liability. The same principles govern their liabilities, whether as primary tortfeasors or as accessories, as apply to anyone else;
• confirmed the following, concerning accessory liability:
• The common law principles of accessory liability operate alongside any relevant statutory tort and, where applicable, impose liability on persons who have not committed the relevant statutory wrong (in the same way that these principles operate in relation to common law torts).
• There is no logical support for the proposition that the mental element required for liability as an accessory should mirror that required for primary liability.
• Procuring a tort and assisting another to commit a tort pursuant to a common design are two distinct bases for imposing accessory liability.
• The relevant test is that to be liable as an accessory for procuring a tort, a person must know the essential facts which make the act done wrongful, even if the tort is one of strict liability. Only if all the features of the act done which make it tortious are known to a defendant whose conduct has procured the infringement, will the defendant be jointly liable with the actual infringer.
• The same test of knowledge applies where accessory liability is based on assistance given in pursuance of a common design.
• Clarified that when ordering an account of profits, an individual cannot be liable to account for profits which they themselves have not made. Further, Lord Leggatt explained the purpose for redirecting profits, when an account of profits is ordered in an intellectual property rights case, is not to punish or deter wrongdoing. It is to achieve the goals which the right exists to further. Namely, to enable the owner of the right to enjoy the fruits of its exploitation. In this way, the redirection of profit causes the infringer to be treated as if he had conducted the infringing business on behalf of the claimant. This places the infringer back in the same position financially as if no infringement had taken place, and provides a sound basis for ordering an account against “innocent” infringers which the law had struggled previously to justify.

Peter Knox KC appeared on behalf of the appellants, leading Dr Timothy Sampson (of Lamb Chambers) and Adam Riley

Peter Knox KC additionally appeared on behalf of the Ahmeds as respondents to Lifestyle’s cross-appeal, leading Laurent Sykes K.C (of Gray’s Inn Tax Chambers). and Dr Timothy Sampson (of Lamb Chambers)

In both the appeal and cross-appeal the counsel team was instructed by Rudi Ramdarshan and Victoria Huxley, of Ronald Fletcher Baker LLP.

Click below to read:

• Our case summary

The Supreme Court’s press releases summarising the judgments:

• Lifestyle Equities CV and another (Appellants) v Ahmed and another (Respondents) – The Supreme Court
• Lifestyle Equities CV and another (Respondents) v Ahmed and another (Appellants) – The Supreme Court