Orthodox bribery: Hopcraft v Close Brothers Limited (2025) UKSC 33

Article by Thomas Grant KC and Ryan Turner, 23^rd July 2025.

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The Supreme Court’s judgment in three conjoined appeals in Hopcraft v Close Brothers Limited [2025] UKSC 33 (“Hopcraft”)¹ concerned an everyday transaction. Motor vehicle dealers had brokered the sale of a car, structured as an outright sale by the dealer to a lender and a back-to-back hire-purchase arrangement between the lender and the customer. There was no contract between dealer and customer, even though the dealer was the only person with whom the customer dealt. The lender paid the dealer a commission for the introduction of the transaction, but the fact of which commission was not disclosed to (or only partially disclosed to) the customer. In each of the three cases, the claimant sued the commission-paying lender for restitution of the commission paid.

The judgment largely turned on two questions: first, whether the existence of a fiduciary relationship is a precondition to the application of the law of bribery; and, secondly, whether the relationship between the dealer and the customer was properly to be characterised as “fiduciary” in nature. The answers that the Supreme Court gave to those questions are likely to bring an end to a model of restitutionary claim against lenders who paid commissions to motor vehicle dealers that had begun to proliferate in the lower courts. The dealer acted as a credit broker for the purpose of the Consumer Credit Act 1974 (“CCA”), but not, the Supreme Court decided, as a fiduciary, essentially because of the dealer’s “continuing status … as a seller of the car” and “its own commercial objective of securing a profitable sale” of that car: at [57], [277]. The civil law of bribery was not, therefore, engaged by these transactions.

However, the judgment will give renewed vigour to claimants in different factual contexts, where the (allegedly) bribed intermediary was a status-based fiduciary such as a fiduciary agent. For those claimants, there are four notable features of the Supreme Court’s judgment. It is these aspects of the judgment with which this note is concerned, rather than the restatement of the test of a fiduciary relationship or the separate analysis of an unfair relationship under s 140A of the CCA.

(1)  Almost two decades ago, in Hurstanger Ltd v Wilson [2007] 1 W.L.R. 2351 (“Hurstanger”), the Court of Appeal² created the concept (but not the nomenclature) of a half- secret or partially disclosed commission — that is, a commission paid to a fiduciary by a third party that suborns the loyalty of the fiduciary to their principal, but which is the subject of some disclosure falling short of the full disclosure necessary to obtain informed consent. Such a payment was, so the Court of Appeal reasoned, not a bribe and did not give rise to the conventional remedies for bribery at common law. Instead, the payment of a half-secret commission was held to entitle the principal to an equitable remedy that was a simulacrum of the restitutionary remedy at law.

The judgment in Hurstanger had puzzled subsequent courts, some of whom had interpreted the decision as concerning a bespoke accessory liability for dishonest assistance (even though the judgment did not refer to the equitable wrong of dishonest assistance as the foundation of the liability there recognised): see, e.g., Johnson v FirstRand Bank Limited [2024] EWCA Civ 1282 (by concession) and Expert Tooling and Automation Limited v Engie Power Limited [2025] EWCA Civ 292. The Supreme Court has now largely given Hurstanger its quietus, deciding, at [209] and [224]-[226], that a so-called half-secret commission is as much a bribe as a “fully-secret” commission. Hurstanger’s only remaining relevance, therefore, lies in its account of the disclosure required to obtain the principal’s fully-informed consent in the particular circumstances of that case.

The Supreme Court’s conclusion restores the common law concept of a bribe described by Romer L.J. in Hovenden & Sons v Millhoff (1900) 83 L.T. 41 (“Hovenden”) as a payment made “without the knowledge and consent of the principal” and aligns the common law with equitable rules by which a fiduciary might seek authorisation to make a profit from its fiduciary role. The equitable conception of “fully informed consent”, classically stated in Dunne v English (1874) L.R. 18 Eq. 524, now applies with equal force for the purpose of the law of bribery. Hence, in a statement which perhaps best summarises the decision as a whole, the Court held that “the tort of bribery is not engaged by anything other than the receipt of a benefit by a person who is subject to a fiduciary duty to which the beneficiary of that duty has not given fully informed consent”: [288]. The payment of a partly-disclosed commission is, therefore, to be treated as bribery and the payer of such a commission is subject to a primary liability for bribery rather than, at most, an accessory liability dependent on proof of dishonesty: [135], [147]. It follows that the debate as to whether the “Hurstanger liability” was dishonesty-based and, if so, what conduct was sufficient to constitute dishonesty, is at an end.

(2)  The Supreme Court also overruled a second Court of Appeal decision that had been generally regarded amongst practitioners as unorthodox. In Wood v Commercial First Business Ltd [2022] Ch. 123 (“Wood”) the Court of Appeal³ had diluted the threshold for the law of bribery to be engaged. It was unnecessary, the Court of Appeal there held at [92], to apply the label “fiduciary” to a relationship for the law on bribery to apply; all that was required was that there be a duty to give to the principal “disinterested” advice, recommendations or information. Though the label fiduciary has, at times, been stretched and applied generously, without a fiduciary relationship it is difficult to see a basis for equity to intervene or for the Court to award a common law remedy in circumstances where relief would not be available in equity. The Supreme Court has, therefore, restored the orthodox view that prevailed prior to Wood, that a fiduciary relationship is necessary (at [199]).

(3) The Supreme Court re-stated the long-standing hostility of English law to bribery and the importance of the law’s prophylactic role to deter it: at [136]-[137] and [145]. The Supreme Court had been invited to abolish the common law tort of bribery in favour of a purely equitable regime, but the Court had little difficulty in declining the invitation. Instead, the Supreme Court endorsed the alternative common law remedies of damages for loss or restitution of the amount of the bribe that are available against the bribed fiduciary and the bribe-payer (see, e.g., [149]-[150]), separate to the proprietary remedy that is also available against the bribed fiduciary, and affirmed the common law presumptions that assist the victimto obtain a remedy (at [152], [155]).

The Supreme Court’s restatement of orthodoxy is significant due to two features of the restitutionary claim against the bribe payer that are, at first blush, peculiar.

The restitutionary claim is premised on the price under the contract that is presumed to have been induced by the bribe being inflated by the amount of the bribe. In some cases, the loading of the contract price in this way will be a fact that can be proven. In Salford Corpn v Lever [1891] 1 Q.B. 168, for example, a coal merchant simply added a bribe of 1 shilling per tonne that he would pay to the plaintiff’s agent onto the contract price proposed. But, in other cases, the relationship between the contract price and the bribe might be more opaque or indirect. Since at least Hovenden, the victim has benefited from a presumption that the contract price was pro tanto inflated, and since at least Mahesan v Malaysia Government Officers’ Co- operative Housing Society Ltd [1979] A.C. 374 that presumption has been treated as irrebuttable. In Hopcraft, the Supreme Court endorsed the irrebuttable presumption (at [227]- [236]). But the question that is likely to arise in the future is how the restitutionary remedy is to be quantified where the bribe took the form of a single omnibus payment for the introduction of multiple transactions (and, therefore, multiple wrongs) or where the bribe was only received after certain conditions were met that could not have been met by the introduction of a single transaction alone.

The second peculiarity arises from the relationship between the contract and the restitutionary claim. Restitution for unjust enrichment is not available where the “enrichment” arises from a contract that is enforceable and on foot: see, e.g., Dargamo Holdings Limited v Avonwick Holdings Limited [2022] 1 All E.R. (Comm) 1244 at [67]. In that instance, there is no “unjust factor”, no “enrichment”, and the conferral of benefits contracted for is not “at the expense of” the claimant. However, those conceptual difficulties do not arise where the claim is not to restitution for unjust enrichment, but to restitution for a wrong: see [150], [229]. Nor, in quantifying the restitutionary remedy is it relevant that the inflation of the contract price merely results in the bribe-payer getting back an amount that they have paid out, so that there is no enrichment or gain in a real sense.

(4)  The Supreme Court left open the question whether the victim of a bribe can pursue cumulative remedies against the bribe-payer and the bribed fiduciary or only alternative remedies (at [190]). If the wronged principal is entitled to pursue a restitutionary claim against both for the amount of the bribe, the wronged principal may receive the value of the bribe twice-over. The principal may, therefore, be in a better position than if its fiduciary had not been bribed at all. But that is not objectionable. It simply reflects the restitutionary nature of the claims available to the principal. Given the policy of the law of bribery, it also seems right. One only needs to stand back and ask: who, as between the briber, the bribed fiduciary, and the wronged principal should have the benefit of the bribe and who should suffer the consequences of it?

Thomas Grant K.C. and Ryan James Turner (along with Professor Paul Davies of Essex Court Chambers) are counsel on behalf of the claimant in Expert Tooling and Automation Limited v Engie Power Limited. Judgment before the Court of Appeal in those proceedings has neutral citation [2025] EWCA Civ 292 and the listing of the hearing of an appeal to the Supreme Court is awaited.

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1           Per Lord Reed, Lord Hodge, Lord Lloyd-Jones, Lord Briggs, and Lord Hamblen.

2           Per Simon Tuckey LJ; Waller and Jacob LJJ agreeing.

3           Per David Richards LJ (now Lord Richards); Males and Elisabeth Laing LJJ agreeing.