Unlawful means conspiracy allegations against solicitors firmly rejected - East-West United Bank S.A. v Gusinski and others [2026] EWHC 2550 (BP)

Claimants against law firms increasingly reach for unlawful means conspiracy instead of or alongside a claim in negligence. In some cases, the attraction of the claim is to give a non-client a potential cause of action against the firm where negligence is unavailable. In other cases, there may be tactical reasons to frame a case in conspiracy.

The recent decision in East-West United Bank S.A. v Gusinski and others [2026] EWHC 2550 (BP) is a rare, and valuable, judgment in a claim against solicitors. We consider the key takeaways for professional services firms and their insurers below.

Factual background

A Luxembourg bank, East-West United Bank S.A. (the "Bank"), sued GSC Solicitors LLP ("GSC"), one of its solicitors, Mr Samuels, and their client, Mr Gusinski, the ultimate beneficial owner of a media group. Mr Gusinski had been debarred from defending and took no part in the trial.

The Bank had lent to a Swiss company in Mr Gusinki's group. The borrower defaulted and the Bank accelerated the loan and called on guarantees from other group companies. The borrower then obtained a temporary insolvency moratorium from the Swiss courts. Under the supervision of an independent trustee, and on the advice of its Swiss lawyers, it stopped paying its receivables into its account with the Bank.

The Bank brought an LCIA arbitration against five guarantors, who were represented by GSC and Leading Counsel. The respondents ran a defence and cross-claim alleging that the Bank had accelerated the loan in bad faith, in concert with a third party, to acquire the group’s valuable film library. They withdrew that case shortly before the final hearing.

In the meantime, GSC had obtained judgment of around $5.2m (the "Judgment Sum") for the group’s holding company, NMDC in other proceedings. The money was paid into GSC’s client account subject to an order to hold the funds pending a proposed appeal (the "stay").

In the arbitration, the respondent guarantors applied to the Tribunal for a staged-payment award and offered, as part of that proposal, that $4.75m of the Judgment Sum would be paid to the Bank once the stay was lifted. The Bank opposed the application. The Tribunal ultimately made a staged-payment award on its own terms: $4.75m immediately and the balance a few weeks later.

Shortly after the Tribunal made its Award, NMDC was placed into liquidation in the Cayman Islands. GSC subsequently transferred the majority of the Judgment Sum to its liquidators on their demand. Nothing was paid to the Bank.

The Bank alleged that Mr Gusinski had led a single conspiracy to delay and ultimately avoid repaying it, which GSC and Mr Samuels later joined.

The law

There are two types of actionable conspiracy torts, i.e. those based upon lawful means and those based on unlawful means.

Both forms of conspiracy require a combination between the defendant and others, and loss caused by action taken in pursuance of it.

Lawful means conspiracy also requires that injury to the claimant was the defendant’s predominant purpose, which is a high bar.

Unlawful means conspiracy requires only an intention to injure. That intention need not be the defendant’s primary aim, but foresight of harm is not enough. The defendant must also know the facts that make the means unlawful, although on the current authorities (The Racing Partnership Ltd v Done Brothers (Cash Betting) Ltd [2020] EWCA Civ 1300, by a majority) the defendant need not appreciate that they are unlawful.

Why the claim failed

The decisive finding was that Mr Gusinski had been trying to keep the group alive and buy time to repay the Bank, not to deprive it of repayment. That was “fatal to both forms of conspiracy alleged”.

The Bank also brought claims for breach of trust, knowing receipt and dishonest assistance, contending that counsel’s submissions to the Tribunal in the arbitration had given it a proprietary interest in the Judgment Sum. These aspects of the claim failed, because the submissions disclosed no final and settled intention to assign the money to the Bank.

The judge nevertheless went on to consider each allegation against the solicitors, and rejected them all on independent grounds.

The judge held that a solicitor or barrister who carries out lawful instructions in accordance with his or her professional obligations is not in any type of conspiracy with the client. This holds even if the client has a predominant intention to injure, for two reasons. First, there is no combination to injure where a solicitor or barrister merely agrees to accept lawful instructions. Second, the client’s intention is not imputed to the adviser, provided (as here) their own intention is simply to do their job properly.

As regards the specific acts relied upon by the Bank:

Diversion of receivables

Mr Samuels had seen emails about payments being withheld from the borrower’s account with the Bank, but had not been asked to advise. The Court found that there was no combination between the solicitors and Mr Gusinski to achieve any particular end, and no intention to injure the Bank.

The arbitration defence

The Bank alleged that the respondents' cross-claim in the arbitration concerning the Bank's motives for accelerating the loan was unarguable. The Bank relied upon the solicitor defendants' obligations under the SRA Code of Conduct not to put forward any contention which was not believed to be properly arguable. The Court did not ultimately decide whether a breach of the Code might constitute unlawful means, as the defendants accepted that deceiving the Tribunal would probably have involved torts which would constitute unlawful means.

The Court held that the Bank failed to establish that the defence and cross-claim were not properly arguable.

In any case, the Court made the following helpful findings in relation to the solicitor defendants' reliance upon their instructed counsel:

"Further, even if it was unarguable, GSC and Mr Samuels were entitled to rely upon Leading and Junior Counsel who pleaded the Defence and Cross Claim and signed it. The signature by Counsel to a pleading has always been taken as a confirmation by that barrister that the pleading raises claims or defences which are properly arguable. Reliance on counsel was not reckless indifference by Mr Samuels as to whether the pleading was arguable; it was confidence in the ability and judgment of his counsel team."

Misleading the Tribunal

The Bank alleged that through the evidence of Mr Gusinski and written and oral submissions in the arbitral proceedings, the defendants misled the Bank and the Tribunal that the Judgment Sum would be paid to the Bank regardless of whether the Award proposed by the respondents was made.

The Court dismissed that argument, finding that the written and oral submissions were "clear and not liable to, or intended to, mislead". The Court also referred to correspondence between GSC and the Bank's solicitors after the hearing, which made clear that payment of the Judgment Sum was not being offered except as part of the proposal for an award for staged payments, which was rejected.

The Court also found that the Bank and Tribunal were not in fact misled, as demonstrated by the Bank's correspondence and the terms of the Award.

Client account payments

The Bank alleged that payments out of GSC's client account of sums which reduced the amount of the Judgment Sum which it held to $4.75m were unlawful.

The background was that the respondents had offered, as part of their proposed staged-payment Award, that $4.75m of the Judgment Sum would be paid to the Bank. GSC had undertaken only to give notice before the sum it held fell below $4.75m.

Sums above that amount were remitted out of GSC's client account to the borrower company. The Bank alleged that this was unlawful because the facility agreement required the sums to be paid into the borrower's account with the Bank, which they were not. The Court rejected that argument because:

• GSC was not party to the facility agreement; and
• the question of whether NMDC was itself in breach of the facility letter was unproven.

The Bank's case that the Judgment Sum was impressed with a trust or the subject of an equitable assignment also failed. The Award imposed a debt on the respondents, not an obligation on GSC or a proprietary interest in the funds. Payment of the balance of the Judgment Sum to NMDC's liquidators, following rejection of the respondents' proposal for the staged payment Award, was also therefore lawful.

The liquidation

The Bank alleged that the solicitor defendants knew that Mr Gusinski intended to wind up NMDC if payment to the Bank could not be avoided or deferred. The Court held that "without more, there is nothing unlawful in that".

The judge concluded that Mr Samuels had conducted himself throughout “with appropriate professionalism” and was “simply doing his job”.

Takeaways for firms and insurers

1. Alternative to negligence for non-clients. The case is a good example of a non-client using conspiracy as the basis to found a claim against a law firm. This continues a trend also exemplified by Vanquis Bank Limited v TMS Legal Limited [2025] EWHC 1599 (KB) last year. Following decisions such as Ashraf v Lester Dominic Solicitors Ltd [2023] PNLR 14, the general position is that a solicitor acting on behalf of a client owes a duty of care only to his or her client. Conspiracy can provide a useful alternative for third party claimants.

2. Claims dependent on the underlying conspiracy. The claimant pleaded that there was a single ongoing conspiracy, which was said to have been joined by the solicitor defendants part way through. The finding that Mr Gusinski lacked the requisite intention meant the whole conspiracy claim failed. The judge also observed that with regard to some of the acts relied upon, there was no pleaded co-conspirator with Mr Gusinski, so it was hard to see them as one conspiracy at all. It will be worth considering whether similar structural issues arise when responding to claims in conspiracy.

3. Aggressive client strategy does not make the lawyers conspirators. The group took hard-nosed steps to protect itself: a foreign insolvency moratorium, a robust defence, liquidation of the group holding company. Despite that, the Judge found that none of the defendants had the requisite intent to found liability for conspiracy.

4. Draft undertakings narrowly and comply with them. GSC declined to undertake to pay the balance of the Judgment Sum to the Bank, citing the risk of a voidable preference under Cayman law. Instead, it undertook to give five business days’ notice before the balance fell below $4.75m. It gave that notice before paying the liquidators, and the Bank took no action. That precision left little room to attack the firm’s handling of the Judgment Sum.

Conclusion

The decision, like all such cases, turned on its particular facts. With that caveat, it should be seen as a broadly encouraging and helpful judgment for solicitor defendants to conspiracy claims. The judgment was notably supportive of the solicitor defendants, who faced a raft of criticisms by the claimant. Although the claim failed through the absence of the requisite intent, the lawyer defendants' position was clearly assisted by a careful and well-documented approach to the underlying litigation. The case is equally a reminder that these claims are now part of the landscape for law firms.