in the fraud.
recovery for these sorts of claims may
be tempted to go straight for equitable
causes of action, since the breach of
fiduciary duties and associated actions
are the ones where misappropriation
may have been dealt with in law school.
However, the equitable actions are
not the only place to look, or even
necessarily the best. These underlying
facts may also give rise to claims for
conspiracy, deceit, or (in Australia)
misleading conduct.
The alternative claims may be more
straight-forward to pursue. They may
also be preferable for procedural reasons,
such as if the rules of court allow you
to get default judgments for damages
claims, but not for other types of relief.
In that case, if other relief is pleaded, the
defendant may be able to simply ignore
the claim without putting on a defense,
and effectively put the victim to the
expense of proving it.
The equitable claims are likely to
be of assistance only where equitable
remedies specific to the equitable claims
are needed, for example if the plaintiff
seeks to be able to trace proceeds of the
fraud, or where the equitable remedy
provides for a higher recoverable amount
than a damages remedy.
Disclose
against both the payer of the bribe, and
the payee of the bribe. While there is
some lack of clarity in the cases, it seems
that bribery is in the nature of its own
tort claim at common law.
claims is the burden imposed on a
person who provides a benefit to the
agent of another. The law defines a bribe
as a payment of a secret commission
whereby the person making the payment:
the person whom he knows to be the
other person's agent.
disclose the payment to the principal.
It is not enough for the payer to say that
they thought the principal was aware
of the payment (or other benefit).
In addition, in a bribery claim
against the payer of a bribe, it does not
matter whether:
from the principal;
irrefutable presumption that the
principal's loss is at least the amount of
the bribe. The principal only needs to
prove loss if they seek to recover more
than the amount of the bribe.
If the only remedy required is
damages, the bribery claim will often be
the most efficient to run, where it applies,
given the simplicity of the elements of
on the participants, and the lack of any
need to prove damages.
Failure to Report
senior employee who has failed to report,
or has even assisted in covering up,
bribery or misuse of funds by another,
even though they were not themself
receiving bribes or misdirected funds.
For some senior employees, there
is an implied obligation in the contract
of employment, to report misconduct
of both more junior and more senior
employees, especially if that misconduct
amounts to misappropriation of company
property. If the employee is sufficiently
senior to attract this obligation, then
it applies even if, by reporting that
misconduct, the employee also reveals
their own misconduct.
An employee who fails to report that
misconduct may be liable for damages
for breach of contract, for amounts
the employer would have saved if the
conduct had been reported.
misappropriation of an organization's
property is very difficult, so it is always
best to have in place procedures
designed to prevent it in advance.
Where an employee has taken bribes,
or misappropriated an organization's
property, there are several causes of
action to consider, rather than just
fiduciary duty claims, and in the case of
bribery, the specific action for damages
bribery may be the most effective
remedy.