Civil remedies for theft — issues for banks

Publication Date01 Jan 1995
DOIhttps://doi.org/10.1108/eb025652
Pages290-294
AuthorLista M. Cannon
SubjectAccounting & finance
Journal
of
Financial Crime
Volume
2
Number
4
Civil remedies for theft
issues for banks
Lista M. Cannon
Received: 14th
November,
1995
Lista M. Cannon is a partner at Richards
Butler.
She was admitted as a solicitor in England and
New York and specialises in transnational litiga-
tion.
Lista M. Cannon is a member of the Editorial
Board of Journal of Financial Crime.
ABSTRACT
Thefts by
employees raise interesting legal and
practical
issues for banks and other
employers
who wish to recover their money in civil
actions.
Immediately, there is the
problem
of
the
variable standard
of proof
required
when
pursuing a civil remedy for theft. Where
spouses
or
others participate
in the
employees'
theft the law of
constructive
trusts may also
need to be examined. Additionally, there are
important practical
concerns associated
with
the gathering of
evidence
and the proof of
loss.
In this paper the writer
considers
those legal
and practical
concerns
and then, by way of
illustration,
concentrates
on the
recent case
of
Bank of England v
Gibson
and others.1
STANDARD OF PROOF
In a civil action where fraud or some
other criminal matter is alleged against a
party who is not a party to the civil
action, the general rule is that proof on
the balance of probabilities is required
and not the higher standard of proof
beyond all reasonable doubt. Where,
however, the alleged criminal is a party
to the civil action, the degree of prob-
ability is increased and must be com-
mensurate with the occasion and
proportionate to the subject-matter. The
element of gravity is a crucial part of the
range of circumstances to be considered
when deciding the appropriate degree of
probability. In such a case there is no
great gulf between the standard of proof
in criminal and civil matters. In Hornal v
Neuberger Products
Ltd2
the plaintiff
brought an action for damages for fraud-
ulent misrepresentation. He alleged that
the director of the defendant company
had, in the course of negotiations for the
purchase of
a
used industrial lathe, stated
that it had been reconditioned by a
reputable firm of toolmakers. The
defendant denied that that statement
had been made. If it had been made the
director would have known it was
untrue. On the claim based on fraud the
court held that the trial judge had to be
satisfied on the balance of probabilities
that such a statement had been made
and that the civil standard was the
correct standard to apply. A higher
standard would have applied if the
director had been a party to the action.
CONSTRUCTIVE TRUSTS
Employees who steal are liable to return
the money stolen in actions for breach of
fiduciary duty, fraud or breach of
Page
290

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