Vicarious Liability for the Dishonest Acts of Partners and Employees
In Dubai Aluminium Company Limited v Salaam, in which judgment was handed down on 5 December 2002, the House of Lords considered the issue of whether innocent partners are vicariously liable for the dishonest acts or omissions of their fellow partners, and in what circumstances and to what extent they may claim contribution from other wrongdoers. In this briefing note we report on the decision and examine whether the House of Lords has brought any certainty to this area of professional indemnity law.
The Background
The proceedings arose out of a complex fraud by which Dubai Aluminium Company Limited ("Dubal") paid out $50m under bogus consultancy agreements. Dubal brought claims against recipients of monies from the scheme, a solicitor who was alleged to have assisted in the scheme ("the Solicitor") and two firms in which the Solicitor had been a partner (which we refer to in this Briefing as "the Firm"). It was
