Introduction

This commentary examines the Court of Appeal’s judgment in Expert Tooling And Automation Ltd v Engie Power Ltd ([2025] EWCA Civ 292), a case that revisits the contentious “half-secret” commission issue and refines the legal standard for when a principal’s informed consent suffices to negate a breach of fiduciary duty. The dispute involved a commercial energy supply relationship where a third-party broker (Utilitywise, UW) was engaged to negotiate contracts between the claimant, Expert Tooling and Automation Ltd (“Tooling”), and the defendant, Engie Power Ltd (“Engie”). The controversy revolved around whether the partial disclosure to Tooling concerning UW’s commission (paid by Engie but added to the unit price) was adequate to constitute informed consent or whether the insufficient disclosure breached the agent’s fiduciary duty.

The case posed fundamental questions regarding:

• The scope of fiduciary duties owed by an agent in situations of potential conflict of interest;
• The sufficiency of disclosure; and
• The accessory liability of a third party (in this case, Engie) in connection with a commission paid under partially disclosed circumstances.

Summary of the Judgment

The Court of Appeal’s judgment confirmed several core principles:

• Fiduciary Duty and Scope: It was determined that UW acted as Tooling’s fiduciary and owed a strict duty of loyalty. However, the judge held that UW’s duty did not extend to a requirement to fully disclose the exact commission amount or its funding details.
• Informed Consent and Disclosure: The critical issue was whether Tooling’s awareness of a commission—merely that "a commission" would be payable—satisfied the legal requirement for informed consent. The judge concluded that, given Tooling’s relative sophistication and the industry practice, the evidence supported that informed consent was obtained. Nonetheless, the appellate arguments raised significant doubts about whether the principal was in fact provided with all material details that might have affected its contractual decisions.
• Accessory Liability and Dishonesty: Tooling’s claim against Engie was principally anchored on the accessory liability principle established in Hurstanger. The court reaffirmed that for Engie to be held liable, it must have procured UW’s breach by paying the commission without the fully informed consent of the principal, and, importantly, the element of dishonesty is essential in establishing such accessory liability.
• Statutory Limitations: On the issue of limitation periods, the judgment clarified that for the first contract, although UW’s entitlement to commission was linked to the energy supply, the claim against Engie was not time-barred because the cause of action accrued only upon payment of the commission.

Ultimately, while the judge was considered to have erred in concluding that Tooling’s informed consent was sufficient, the claim against Engie was dismissed on the ground that no evidence of dishonesty was established against Engie. Consequently, permission to amend the appeal to advance a dishonesty argument was refused.

Analysis

Precedents Cited

The judgment extensively referenced several precedents that continue to shape fiduciary and agency law:

• Hurstanger v Wilson [2007] EWCA Civ 299: This case established that if an agent receives a “half-secret” commission without the fully informed consent of the principal, both the agent and the party paying the commission could be liable. The case was central to the discussion surrounding accessory liability.
• Bowstead & Reynolds on Agency: This authoritative text was heavily relied upon, particularly relating to the elements of fiduciary duty. Its principles on informed consent and the necessity for full disclosure provided the backbone of the analysis concerning UW’s obligation.
• Kelly v Cooper [1993] AC 205: The decision in this case was used to illustrate how fiduciary duties may be modified by contractual relationships but emphasized that such modification must be explicit or implicit within the contractual framework.
• Twinsectra v Yardley [2002] 2 AC 164: This case provided important guidance on the requirement for dishonesty in accessory liability claims, reinforcing that a third party (such as Engie) must be proven to have knowingly turned a blind eye to the breach.
• FirstRand Bank Limited [2024] EWCA Civ 1282: Although pending further appeal at the Supreme Court, FirstRand was referenced for its analysis of when partial disclosure negates the secrecy component that would otherwise trigger a fraud or breach claim. Its interpretation of dishonesty in this context was crucial for the ground 8 discussion.

Legal Reasoning

The court’s reasoning can be broken down into several key steps:

• Delineation of Fiduciary Duty: The court reiterated that the core fiduciary duty of loyalty requires an agent to avoid conflicts of interest. UW’s failure to fully disclose the precise details behind the commission raised critical questions as to whether the duty had been breached. However, the judge ultimately maintained that, within the context of the contractual relationship between Tooling and UW, the duty was not extended to the granular disclosure of commission calculation.
• Informed Consent and Disclosure Requirements: A fundamental component was whether simply knowing that a commission existed sufficed, or if the principal was required to be informed of additional material facts – such as the exact commission amount, its method of calculation, and its inclusion in the final energy price. The judge’s reliance upon the testimony of sophisticated company representatives and reference to industry custom was pivotal, even as the appellate arguments challenged this view, arguing that the standard of full disclosure should be strictly interpreted.
• Accessory Liability and the Role of Dishonesty: The legal analysis turned to explore whether Engie, by paying the commission, had “procured” UW’s breach. The court’s approach underlined that accessory liability in equity depends on proving that the party assisted in the breach with a level of dishonesty. The judgment reasserts that, consistent with the established case law, if the payer does not exhibit evidence of dishonesty (such as knowing non-disclosure or deliberately ignoring the lack of informed consent), then liability should not attach.
• Commencement of the Cause of Action: Finally, the court clarified the chronological aspects: the cause of action for equitable compensation against Engie accrued only when commission payments were actually made, not when the underlying contracts were struck, thereby addressing potential limitation period concerns.

Impact on Future Cases and the Relevant Area of Law

This decision is likely to have far‐reaching implications in the fields of agency and fiduciary law, particularly for commercial transactions involving “half-secret” commission arrangements:

• It reinforces the requirement that an agent must obtain full, informed consent from its principal before acting in circumstances where its own financial interests are at stake.
• It clarifies that industry custom or general disclosure (such as indicating that a commission “may” be included) is not a substitute for a detailed disclosure of material facts that directly affect the principal’s decision-making.
• It underscores that a third party payer (here, Engie) can only be held accessory to a breach of fiduciary duty if there is clear evidence of dishonesty. This standard ensures that commercial entities are not unduly penalized in the absence of a deliberate concealment or a “firmly grounded” suspicion of non-disclosure.

Complex Concepts Simplified

Some of the legal concepts discussed in the judgment are inherently complex. Below is an attempt to clarify these:

• Fiduciary Duty: This is a relationship characterized by loyalty and trust. In agency relationships, a fiduciary must not profit from a conflict of interest without the principal’s fully informed consent.
• Informed Consent: Rather than just knowing that a commission exists, the principal must be made aware of all material facts – including the commission’s amount, how it is calculated, and the potential conflicts that arise from such an arrangement.
• Accessory Liability and Dishonesty: For a third party (such as Engie) to be held liable as an accessory, it must be shown that they either knew or deliberately ignored the fact that the agent (UW) was not fully disclosing material information. The threshold for dishonesty follows the principles set out in Twinsectra and reinforced in recent cases.
• Partial Disclosure (“Half-Secret” Commission): This term describes a situation where the principal is given some, but not all, of the necessary details concerning a commission. The judgment grapples with whether such limited disclosure negates the element of secrecy enough to avoid a breach of fiduciary duty.

Conclusion

The Court of Appeal’s judgment in Expert Tooling And Automation Ltd v Engie Power Ltd significantly clarifies the parameters of informed consent within fiduciary relationships. The decision confirms that while general acknowledgment of a commission may be sufficient under certain circumstances, true informed consent requires that all material factors—including the precise amount, the manner of calculation, and the potential conflict of interest—be fully disclosed.

Moreover, the ruling reasserts the principle that any accessory liability attributed to a third party, such as Engie, is strictly contingent upon evidence of dishonesty. In the absence of such evidence, a claim for equitable compensation based on the payment of a partially disclosed commission cannot succeed. This judgment thereby reinforces the established legal framework while simultaneously signaling that future disputes over “half-secret” commissions will demand rigorous scrutiny of the disclosures made, ensuring that principals are not inadvertently misled.

In summary, the decision reaffirms the importance of full and material disclosure in fiduciary contexts and provides clearer guidance on the demarcation between acceptable commercial practice and a breach of duty arising from inadequate disclosure. The outcome is likely to have significant implications for both agency practice and third-party liabilities in similar commercial arrangements.