Court of Appeal considers vicarious liability arising from a partnership (Northampton Regional Livestock Company Limited v Cowling & Anor)

Article summary

Dispute Resolution analysis: The Court of Appeal has allowed an appeal from a finding that despite the breach of fiduciary duty of one partner in a partnership, the other (unaware) partner was not jointly and severally liable. This had been on the basis that the action giving rise to the breach was sufficiently divorced from the ordinary course of the partnership business. Although in human terms the exoneration of the innocent partner was understandable, it was legally subversive of the vicarious liability policy. The individual in breach was not moonlighting but carrying out the business of the partnership and therefore liability extended to his partner. Unsurprisingly, this decision also had costs implications whereby the claimant company had achieved greater success and as such should be awarded more of its costs (written submissions were invited as to the appropriate order).