What States Should Know About Unlawful Means Conspiracy

Who can be sued? A civil claim for unlawful means conspiracy might be available against anyone knowingly and sufficiently participating in a bribery scheme, or in the theft of public assets, or in other corruption; or in the laundering of the proceeds of corrupt activities. 

When might it be used? A state may consider making a claim for unlawful means conspiracy when a claim is unfeasible against the person traditionally regarded as the principal wrong-doer, for example a corrupt public official with political protection or with insufficient available or identifiable wealth to compensate the state fully.  

For example? The claim will be available against a group of conspirators that steal funds or put together a bribery scheme.  A claim might be available against family members, associates, financial institutions, lawyers or accountants that have facilitated corruption, knowingly received and transferred away corrupt funds or set up complex structures to conceal the payment of bribes or theft of assets.

It is also worth knowing that a corrupt public official and the companies, trusts or other legal entities he or she establishes to conceal the corruption or launder its proceeds can conspire together.  

What needs to be proved?  The state must prove:

• An unlawful act. This could include bribery, theft of public assets, other corrupt acts or breach of fiduciary duty; or the laundering of their proceeds. It is notable that the act need not be criminal; civil wrongdoing is sufficient.
• An "agreement" between two or more people to act unlawfully in this way.  The "agreement" could be formal or informal, written or unwritten, and is typically inferred from conduct. It is meaningful combined conduct that founds a claim. Participants could join the conspiracy at different stages of the corruption scheme.
• The performance of that "agreement".   There is no claim unless the conspiracy has taken place.
• An intent to injure the state.  The primary goal of those involved in bribery, theft of public assets or other corruption is to enrich themselves or others. The courts will infer an intention to injure from these activities, as it is obvious that the state will be harmed by them. 
• Loss to the state.  The state must prove that it has suffered loss.  That could be the amounts stolen, the difference between the transfer price and the market price of an asset sold as a result of bribery, or the losses suffered as a result of the poor performance of a contractor that has won a contract by bribery.

What losses?  If a claim is successful, the defendant is liable for all of the recoverable losses that the state has sustained.

What are the benefits of the claim?  A conspiracy claim widens the range of defendants that can be sued, allowing a state to target those participating in wrongdoing with assets available to satisfy a claim.  It can also be a route to obtain compensation from defendants that might not be susceptible to any other type of claim.

Please contact James Maton (jmaton@cooley.com or +44 (0)20 7556 4445) or Jamie Humphreys (jhumphreys@cooley.com or +44 (0)20 7556 4419) if you require further assistance.

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