Fowl Play: Lessons from Lux Films Ltd v Fowler & Anor [2026] EWHC 963 (KB)

The High Court's decision in Lux Films Ltd v Fowler & Andrew Fowler Media Ltd [2026] EWHC 963 (KB), handed down on 24 April 2026 by Mr Justice Sweeting, is a significant judgment for commercial practitioners. Arising from the breakdown of a small owner-managed media production company, the case provides valuable lessons in directors' duties, unlawful means conspiracy and the tactical use of insolvency when competitive exits go wrong.

Lux Films 

The Claimant, Lux Films Ltd ("Lux"), was a small UK video production company incorporated in 2016, held in equal shares by three director-shareholders including Mr Fowler, who were also its salaried employees. There was no shareholders' agreement and none of the directors had a written contract of employment.  

Relations between the directors deteriorated in early 2023 and Mr Fowler expressed his wish to exit.  Rather than resign and compete openly, he secretly set about diverting Lux's clients and business opportunities to his own newly incorporated company, Andrew Fowler Media Ltd ("AFML"). He continued to draw a salary, occupy Lux's office, and use its IT systems, staff, and confidential information.   AFML generated in excess of £450,000 plus VAT in gross revenue between February 2023 and September 2024. 

A Bit Naughty 

In a message to a friend, Mr Fowler described his conduct as "a bit naughty" but suggested it would be "hard to prove" - a candid acknowledgment, in Mr Justice Sweeting's view, that he knew his conduct was improper.  AFML argued, by analogy with the criminal law principle laid down in R v McDonnell [1966] 1 QB 233, that no conspiracy was possible because Mr Fowler and AFML were not independent psychological actors but were, in substance, one and the same person. 

Allowing the claim, the High Court held that, as a matter of civil law, a sole director can indeed conspire with his own self-run company and so be liable for unlawful means conspiracy. In delivering judgment, Mr Justice Sweeting carefully distinguished between criminal and civil conspiracy. The decisive question in any civil claim was whether there was evidence of concerted action between two legal persons, as opposed to two independent psychological actors. Since Mr Fowler had acted unlawfully in his capacity as a director of Lux to divert business opportunities to AFML, and then acted in his capacity as a shareholder of AFML to cause AFML to receive those opportunities, this threshold was met. Mr Justice Sweeting succinctly summarised this principle: “Equity does not permit a fiduciary to evade liability by interposing a company under his control” [145].

For shareholders and directors, this will assuage concerns, as individuals cannot shelter behind the corporate veil simply by routing their wrongful conduct on exiting their employer company through a corporate vehicle in their control. For Claimant businesses pursuing departing directors, this opens the door to joint and several liability against both the individual and the corporate recipient of diverted work, expanding the pool of assets available to Claimants on enforcement.

Preparatory Steps Defence

In tandem, the Court firmly rejected argument that Mr Fowler’s conduct amounted only to permissible “preparatory steps” for future competition. It is settled law that a director contemplating departure may take certain preparatory steps, including the incorporation of a company, lease of premises, or informing of potential investors, provided these do not involve actual competition or misuse of confidential information as against the company they will exit. The director’s conduct here was deemed to go far beyond this, to wholesale solicitation of Lux’s clients and performance of competing work through AFML. 

Mr Justice Sweeting reinforced that the preparatory steps defence available to directors has well-defined limits, and that line in the sand may be crossed regardless of whether formal resignation has yet occurred. The Claimant’s confidential information, including client pricing, contact details and operational workflows were protected via liability on two fronts: a successful equitable claim for breach of confidence, and a successful contractual claim for breach of implied duty of fidelity. Even in circumstances as in Lux Films Ltd v Fowler, where there were no express competitive restrictions in place to rein in a departing director’s conduct, companies may draw some comfort from belt and braces protection of commercially sensitive business information. 

Tactical Insolvency - A Mistaken Assumption

Additional lessons may be drawn from the development that arose shortly before trial when AFML entered voluntary liquidation, and Mr Fowler was made bankrupt, without notice to the Claimant and against a backdrop of an unpaid costs order in their favour. It was noted by Mr Justice Sweeting that this might be considered an attempt to secure an automatic stay of proceedings, and the Court emphasised that strategic timing of voluntary insolvency while a Defendant was on the approach to the door of the Court in attempt to secure an automatic stay of proceedings was a “mistaken assumption”. 

This is a salutary reminder that tactical insolvency will not necessarily derail proceedings as potentially hoped; Claimants facing last-minute insolvency filings should consider whether the circumstances support an argument that the Court should decline a stay and proceed to determine liability. 

Conclusions

Lux Films Ltd v Fowler is a decision rich in practical guidance for commercial practitioners.  The corporate form is no sanctuary for a faithless director: where a fiduciary interposes a vehicle under his control, the court will look through form to substance and impose liability on both the individual and the company.   The judgment also serves as a stark reminder that duties owed by directors and employees do not diminish simply because relationships sour; if anything, it is precisely in such circumstances that those duties matter most.   For owner-managed businesses, the case underscores the importance of documenting the terms of engagement from the outset: shareholders' agreements, written contracts of employment, and express restrictive covenants remain the first and best line of defence.  Where those protections are absent, however, equity, fiduciary duty, and the tort of conspiracy stand ready to fill the gap. As Mr Fowler discovered, conduct that is "a bit naughty" may prove rather more costly than anticipated.