We look at the recent Supreme Court decision in Jetivia v Bilta  UKSC 23 in relation to the question of in what circumstances will the knowledge of a director or officer of a company be attributed to the company itself.
As a matter of English law, it is generally the case that a company will be responsible for the actions of its directors and, in many cases, its employees. In contract, this manifests itself through the rules of agency; in tort, through the doctrine of vicarious liability.
However, the fact that a company is responsible to third parties for the actions of its directors, is not the same as the question of whether the knowledge or actions or a director should be attributed to the company – for example, vicarious liability does not involve the attribution of wrongdoing by a director (or employee) to the company, but rather imposes strict liability on the company for acts done in the course of employment.
There are many circumstances in which the court must determine whether the knowledge or actions of an officer should be attributed to the company and the question has arisen in several recent cases.
The general position is that knowledge and actions of a director will be attributed to the company, although questions of attribution are sensitive to the particular facts and this principle has been held not to apply in circumstances where what is in issue is the company’s knowledge of wrongdoing by a particular director.
For example, what is the position where the claim is brought on behalf of the company itself, for example by a liquidator, for losses caused to the company as a result of the (former) employee or officer’s conduct? Should the knowledge or conduct of the director/employee be attributed to the company, thereby providing the director or employee with a defence to the company’s claim on the grounds of ex turpi causa – in other words that the company should be precluded from claiming as a result of its own illegality?
This issue had previously been looked at by the House of Lords in Stone & Rolls v Moore Stephens  1 AC 1391. That case concerned a claim by a company in liquidation against its auditors. The claim was for alleged negligence on the basis that the auditors had failed to detect and prevent wrongdoing by the company’s sole director, as a result of which, the company became liable to various defrauded banks. The majority of the House of Lords held that the claim failed on the basis that the fraud in that case should be attributed to the company. However, the reasoning behind this decision and the question of what principles may be derived from it has given rise to much debate.
A similar question came before the Supreme Court in the case of Jetivia v Bilta  UKSC 23. However, unlike Stone & Rolls, which involved a claim by the company against a third party, in Bilta the defendants were the alleged wrongdoers themselves.