Court of Appeal considers liability of a Financial Services Advisor for fraud of an agent
Roger ter Haar QC led Simon Howarth, previously of Crown Office Chambers, now of Hailsham Chambers, in resisting an appeal in the case of Frederick v Positive Solutions (Financial Services) Ltd  EWHC 642 (Ch). The case involved an attempt to impose liability upon an FSA for fraud on the part of the FSA’s agent of which the FSA was totally unaware. The attempt relied upon developments of the law in different areas of the law, namely vicarious liability of an employer for sexual abuse and of a person in an analogous position to an employer for personal injuries. The Court of Appeal rejected this attempt to create a unified approach to the law unifying the different areas of sexual abuse and personal injury cases with commercial liability in the financial services industry for fraudulent agents. The Court of Appeal accepted the continuing applicability of authority that it is not sufficient to establish vicarious liability for fraud of an agent that the agent’s principal created an opportunity for dishonesty. More is required.
For the full transcript of judgement, please click here.