Can a firm be liable for the actions of receivers?

A High Court judge dismissed an appeal of an order striking out a litigant in person’s claim against a firm, of which relevant receivers were employees, holding that the firm could not be vicariously liable for the actions of the receivers.

A litigant in person claimant issued a claim against the employer of fixed charge receivers appointed in respect of a company. He took an assignment of claims against the receivers from the company’s liquidators and entered into a standstill agreement with the employer.

The claim against the employer was struck out on the basis that it had been issued against the wrong party. It should have been issued against the receivers personally, but no standstill agreement had been entered into with them, so the claim against the receivers in respect of the sale of a property was statute barred.

The High Court master had some sympathy with the claimant in respect of the conduct of the employer, and reflected that in the costs order made, but struck out the underlying claim.

The claimant appealed that decision to a High Court judge, who dismissed the appeal.

The judge held that a receivership appointment was a role personal to the receiver as an individual, and any claim against a receiver for his or her actions lay against the individual, not a firm with which they may be associated.

In addition, in respect of the attempt by the claimant to establish that the employer was vicariously liable for the actions of the receivers, the judge held that, in order to establish vicarious liability, as a receiver “is acting in the course of their appointment in respect of acts and defaults in the receivership and not in the course of their employment”, their employer is not vicariously liable for such acts and defaults.

In reference to Yerbury v Azets Holdings Limited [2025] EWHC 757 (KB).