Economic Torts Lecture
Just as tort law recognises that one can negatively affect a person or their property through either negligence or intent, tort law also provides a framework for dealing with intentional interference with a person’s business or livelihood. Indeed, if these were not in place, a malicious actor could satisfy themselves with destroying an individual financially, whilst leaving their person and property untouched.
Two of the economic torts are procuring a breach of contract (sometimes found under the heading of ‘wrongful interference with a pre-existing right’) and causing loss by unlawful means. Conspiracy is a separate tort. It involves two or more people acting in combination, either using unlawful means with the intention of injuring the claimant, or acting with the predominant purpose of injuring the claimant. In either case the acts done in pursuance of the agreement must cause loss.
Exam Consideration: Since the economic torts often involve contracts you will need a working knowledge of how contract law operates before you can confidently deal with problem questions. Nonetheless, remember that a tort law essay or exam answer will be marked on the basis of your tort knowledge, so don’t get too hung up on peripheral contract law issues.
Before continuing, it is worth noting an important point - unless a breach of contract is induced, or an unlawful act occurs, harsh business practices alone will not establish either of these first two torts. This can be seen in Mogul Steamship Co Ltd v McGregor, Gow & Co [1889] LR 23 QBD 598, affirmed [1892] AC 25. The claimants were driven out of their market, Chinese tea shipping, by the defendants, a group of merchants who offered much more favourable terms to their Chinese contacts. The courts rejected a claim for economic tort - the defendants used lawful competitive means with the predominant object of securing trade for themselves. The exception to this rule is conspiracy to injure, discussed below, but even this exception is rarely applied.
Inducing a Breach of Contract
Contracts form the backbone of business operations. A given organisation will have multiple contracts with the businesses which provide it with stock or raw materials, and everyone who provides services to it will be contracted to do so - from the part-time employee in the post room, up to the CEO. Each and every one of its customers will create a contract whenever they deal with the organisation (even if these contracts are not in traditional paper form.) If these contracts are not fulfilled as each side promises they will, this can have severe and unanticipated negative effects for both parties. Consider a car manufacturer with an order to fill - if a steel supplier suddenly refuses to meet its contractual obligations to supply the manufacturer, then the manufacturer will suddenly find itself unable to manufacture the promised cars. This will have knock-on effects on its stock and all of the employees it has employed - indeed, if a given business forms a significant enough proportion of a given national economy, a singular breach of contract can be disastrous. Contract law has developed its own mechanisms to deal with the steel supplier - but if a third party has been the one to persuade the steel supplier to deny the promised steel (for example by offering it a bribe) they will largely be untouchable in contract, since they were not party to the steel supply contract. This is where tort law steps in: to provide a cause of action against the third party for persuading the supplier to breach its contract.
Exam Consideration: Although the inducement can come in the form of a better offer, it would be a mistake to regard this as the only form of inducement. Inducement can come in the form of a threat, but the defendant must procure an actual breach by the contracting party. Simply preventing performance is not enough.
The root of the tort can be found in Lumley v Gye.
Case in Focus: Lumley v Gye [1853] 2 E & B 216
The claimant had contracted for the services of an opera singer. The defendant then offered to pay the opera singer a higher fee to sing at his theatre instead. Whilst an action lay against the singer for breach of contract, a majority held that the pleaded facts, if proved, also disclosed a cause of action against the defendant. Notably, the court discussed that under contract, the damages might be limited in a way which would mean they failed to properly reflect the claimant’s harm. The inducer was answerable as an accessory to the singer’s breach.
The Tort Requires Malice
It should be noted that the tort requires malice on the part of the defendant. Rather than active hostility, this refers to the concurrence of two things - the defendant must know that the conduct procured will breach the contract, and they must intend to procure that breach. An honest belief that no breach will result can defeat liability even if mistaken. Deliberately turning a blind eye can amount to knowledge. Thus a defendant who unknowingly offers a better contract to a third party than the one they are already in will not be liable.
Regarding intention, a defendant who carelessly causes another to breach their contract will not suffice, as in Cattle v Stockton Waterworks Co [1875] LR 10 QB 453. The defendant installed and maintained a water pipe. This pipe sprung a leak, and flooded some land the claimant was attempting to build a tunnel under, making performance of their contract more expensive. The claim was for the contractor’s financial loss through negligence and it failed. There was no intentional procurement of a breach.
The defendant must intend the breach as an end in itself or as a means to a further end. Merely foreseeing a risk of breach and proceeding regardless does not suffice.
This is important, since there are certain contract exemption terms which allow a party to not follow through with their obligation whilst still not technically breaching the contract, as long as certain circumstances are fulfilled (for example, see force majeure terms). Where the clause excuses non-performance, there is no breach to procure. The earlier approach to interference with performance can be seen in Torquay Hotel Co Ltd v Cousins.
Case in Focus: Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106
The defendants were trade union officials who, in a dispute with the claimant hotel, declared it to be ‘black’ (as in ‘blacklisted’). This had the effect of preventing the hotel’s oil supplier, Esso, from being able to deliver oil, since it employed members of the union as drivers. In effect, this meant that Esso could not fulfil the supply contract it had with the hotel. However, Esso had a force majeure term in its contract, stating that it would not be in breach of contract if it was prevented from carrying out its obligations by, amongst other things, labour disputes. Thus although the defendants had acted with the intention of inducing a breach of contract, and had effectively accomplished their goal by harming the hotel’s oil supply, they technically hadn’t caused any breach of contract.
Lord Denning MR held that interference with performance could itself be actionable. On his approach there had to be interference with the execution of a contract (even if that interference didn’t result in breach), and that interference had to be deliberate and direct. Since these three elements existed in the case at hand, the clause did not prevent liability for interference.
It should be noted, however, that the House of Lords in OBG Ltd v Allan [2007] UKHL 21 took a narrower view of inducing breach than that adopted in Torquay Hotel. Lord Hoffmann drew a distinction between ‘inducing breach of contract’ (which requires an actual breach of contract, brought about by the defendant’s persuasion of the contracting party) and ‘causing loss by unlawful means’ (which covers situations where a defendant uses unlawful means to interfere with a third party’s performance of a contract, without necessarily inducing the third party to breach). The absence of a breach defeats a claim for inducing breach. A claim for causing loss by unlawful means can succeed only if its own requirements are met.
Thus the tort of inducing breach of contract requires that the defendant has persuaded or procured a contracting party to break their contract, causing loss to the other contracting party. Regarding knowledge, a defendant’s knowledge that their actions will cause a breach of contract is not enough to demonstrate intent - the breach can be a means to the defendant’s end, but cannot be merely a foreseeable consequence. This can be seen in OBG Ltd v Allan.
Case in Focus: OBG Ltd v Allan [2007] UKHL 21
The defendants took control of the failing claimant company as receivers. It later emerged that their appointment was invalid, and thus their control of the company was illegitimate. Whilst in control of the company, the defendants managed the company’s pre-existing contracts and settled contractual claims. The company argued that the receivers had interfered with its contractual relations.
This claim failed - the receivers had been acting in good faith (having been told by another organisation that they were rightfully appointed as receivers), and had merely managed the contracts as any competent receiver would have. There was no breach or non-performance of any contract. The receivers had neither used unlawful means against a third party nor intended to cause the company loss. The House of Lords took the opportunity to comprehensively restate the principles governing both the tort of inducing breach of contract and the tort of causing loss by unlawful means, drawing clear distinctions between them.
Knowledge of the other contract does not need to be particularly detailed, as per JT Stratford & Son Ltd v Lindley [1965] AC 269. The defendants were union officials who, in a trade dispute, told their members to refuse to work on the claimant’s barges (thus preventing the hirers from returning barges to the claimant as required). Whilst it could not be said that the defendant had specific knowledge of the terms of the contracts that they were seeking to breach, this was not necessary - it was merely enough to know that they were causing some sort of contractual breach.
The tort is also one of inducing a third party away from a contract they are already in, rather than putting a better offer on the table when the third party is merely considering what deal they will take. This can be witnessed in Allen v Flood [1898] AC 1. The defendant, a union official, told an employer that boilermakers would not work alongside two shipwrights who had previously done ironwork. All of the workers were employed on a day-by-day basis - so each worker essentially entered into a new contract with the employer each day. The employer was thus pressured to get rid of the shipwrights, else it would lose the service of the boilermakers. The shipwrights then sued the official on the basis that he had caused them to become unemployed. This was unsuccessful - no contract had been breached since employment could lawfully end that day. The official had thus only persuaded the employer not to contract with the claimants again. Whilst the claimants might have had an expectation that they would be given work, this was not a legal obligation.
Exam Consideration: As you will have noticed by now, union action features heavily in the case law surrounding this tort. However, it is worth being careful when dealing with trade unions - certain acts are protected under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA 1992), ss. 219-220, which protect specified forms of contractual interference in contemplation or furtherance of a trade dispute and provide for peaceful picketing. Actions that would otherwise be tortious (such as inducing breach of contract) may be protected by these immunities, provided the statutory conditions are met, including any applicable ballot and notice requirements. Secondary action is generally excluded. In short: be wary of quickly stating that a union has acted illegitimately, and be aware that many of the older cases discussed in this lecture pre-date the current statutory framework. Furthermore, don’t assume that the actions taken by the defendant unions in the cases above and below are indicative of what a union can and cannot do today. Trade union law is itself a distinct and complex topic, under the heading of Labour Law.
Damage is Required
It is not enough for a defendant to have merely induced breach of contract - the claimant must show some loss has stemmed from the action. However, this does not necessarily mean that quantifiable loss needs to have arisen from the breach of contract. Thus, in Exchange Telegraph Co v Gregory & Co [1896] 1 QB 147 the defendants induced disclosure of stock information in breach of the terms on which a subscriber had received it. The court granted an injunction. Damage may be inferred where the breach would ordinarily cause the claimant loss, even if no specific lost sale can be proved.
Defences
A defendant can argue that their actions were justified as a defence to this tort. However, the bar for advancing this defence is understandably high, so as to avoid eroding the utility of the tort. Thus in South Wales Miners’ Federation v Glamorgan Coal Co Ltd [1905] AC 239 the defendant union asked their members to only work intermittently at their employer’s coal mine (effectively, a partial strike.) The miners were paid on the basis of the current price of coal. The defendant union argued that in doing so, they were reducing the supply of coal and thus increasing the price, to the benefit of both its members and the mine owners; in essence, a justification for their tortious actions. As pleasingly novel as this argument might be, it failed.
There is one noted example of inducing a breach being held to be justified, in Brimelow v Casson [1924] 1 Ch 302. The Actors’ Association sought to secure a living wage for chorus girls employed by touring companies. In an attempt to have its members paid properly, it persuaded a number of theatres to break their contracts with the manager. Whilst this constituted inducement of breach, the defendants argued that they were justified in doing so - there was evidence that wages below a living wage had driven chorus girls into prostitution. This argument succeeded and the claim failed.
A particular form of justification can be employed when the defendant can demonstrate that they are exercising a right which trumps that of the claimant. This is illustrated in Edwin Hill & Partners v First National Finance Corporation [1989] 1 WLR 225. The defendant lent money to a developer to develop some land. It took security for the loan and was therefore a secured creditor, and thus had rights over the land. The claimants were a firm of architects who also had a contract with the developer to work on the land. The loan lapsed, thus giving the defendant a right to call in its debt; this would have resulted in the defendant taking over the land, and the claimants would have had their contract terminated. Instead, the defendant arranged for a re-financing deal, part of which involved the developer appointing a new firm of architects and thus dismissing the claimants. The claimants sued for inducing a breach, but failed - the defendant’s actions were justified since it had a secured right whose enforcement would have stopped the development. Instead, it had taken the less economically destructive path of ensuring the development went ahead. There is also a distinct rule for an agent or director acting in good faith within the scope of their authority in procuring their own company’s breach (Said v Butt [1920] 3 KB 497, considered in Lifestyle Equities CV v Ahmed [2024] UKSC 17).
Causing Loss by Unlawful Means
It is also a tort to interfere with the claimant’s trade using unlawful means. For example, a defendant might threaten a claimant’s client so that they withdraw business from them. Alternatively, a defendant on a picket line might threaten an employee with violence on their way into work, in order to dissuade them from working for the claimant.
The defendant must use unlawful means against a third party which interfere with that party’s freedom to deal with the claimant, intending thereby to cause the claimant economic loss. The interference must cause such loss. The leading modern authority on this tort is OBG Ltd v Allan [2007] UKHL 21, in which the House of Lords restated the elements of the tort and drew clear boundaries between it and the tort of inducing breach of contract.
Exam Consideration: Despite the lifespan of the economic torts lasting several centuries, there has historically been much confusion within the judiciary as to what the different categories of economic tort are, and when they should be applied (and as you might notice, even what they are called!) The decision in OBG Ltd v Allan [2007] UKHL 21 brought much-needed clarity to this area, but when dealing with problem questions, you may still need to consider more than one of the torts in relation to the same set of facts. It is obviously worth trying to work out which is the best fit, but don’t panic too much if it isn’t immediately apparent.
Intention to Harm
It is necessary for a claimant to demonstrate that a defendant has the intent to injure their business via their unlawful act. This will sometimes be obvious - so a defendant owner of a delivery company who lets all of the air out of the tyres of a competitor’s vehicles clearly shows intent. If these are the competitor’s own vehicles, however, that interference is direct. For the unlawful means tort the defendant might instead disable a customer’s vehicles to prevent that customer from dealing with the competitor.
Sometimes it is less clear than this, however - a defendant might take an unlawful act which harms the claimant, but which isn’t inherently aimed at the claimant. The intention element was subject to significant discussion in the ‘OBG Trilogy’ - three appeals heard together by the House of Lords: OBG Ltd v Allan, Douglas v Hello! Ltd (No. 3), and Mainstream Properties Ltd v Young [2005] IRLR 964, all reported under [2007] UKHL 21. These three cases represent the most authoritative modern restatement of both this tort and the tort of inducement of breach. It should be noted that the Douglas v Hello! claim was ultimately decided on the basis that a breach of confidence had occurred, rather than unlawful interference.
Case in Focus: Douglas v Hello! Ltd (No. 3) [2007] UKHL 21
Hello! magazine bought covert photographs taken by an unauthorised photographer at the wedding of the claimants - actors Michael Douglas and Catherine Zeta-Jones. They had a deal with Hello! magazine’s competitor, OK! magazine, stating that OK! would have exclusive rights to publish the authorised photographs. Hello! published the photographs and were sued by the claimants (in conjunction with OK!). In giving his speech, Lord Hoffmann noted (at [134]) that he believed the necessary intention to injure OK! was present. He doubted whether the separate requirement of interference with the Douglases’ freedom to deal with OK! was satisfied ([129]). This wasn’t aimed directly at OK! - the defendant’s main goal was to profit from distributing the photos, rather than directly harming the exclusivity of OK! magazine’s publication of them. However, ‘stealing’ the exclusivity was the defendant’s only way of publishing the photos, rather than merely a foreseeable consequence. This satisfied the intent criterion.
Lord Nicholls described the intent element as follows:
“Intentional harm […] satisfies the mental ingredient of this tort. This is so even if the defendant does not wish to harm the claimant, in the sense that he would prefer that the claimant were not standing in his way. […] Take a case where a defendant seeks to advance his own business by pursuing a course of conduct which he knows will, in the very nature of things, necessarily be injurious to the claimant. In other words, a case where loss to the claimant is the obverse side of the coin from gain to the defendant. […] If the defendant goes ahead in such a case […] his state of mind will satisfy the mental ingredient…”
- Lord Nicholls, at [165] and [167].
This can be regarded as building on the case of Lonrho (below), which also involved an unlawful act which wasn’t made directly against the claimant.
Unlawful Means
Until the decision in OBG Ltd v Allan, this criterion was quite wide, including just about any act which a defendant was not at liberty to do - including those prohibited by tort or contract. In OBG Ltd v Allan [2007] UKHL 21, however, the scope of what fulfilled the unlawful means criterion was significantly narrowed. At [49]-[51], Lord Hoffmann provided the following definition: “Unlawful means consists […] of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful […] and which is intended to cause loss to the claimant. It does not in my opinion include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant.”
The key principle is that the unlawful means must interfere with the freedom of a third party to deal with the claimant. The conduct must be actionable by the third party, or would have been actionable if that party had suffered loss. This three-party structure - defendant, third party, and claimant - is central to the tort as restated in OBG.
The Supreme Court confirmed the dealing requirement in Secretary of State for Health v Servier Laboratories Ltd [2021] UKSC 24. Alleged deception of the European Patent Office and the courts did not interfere with their freedom to deal with the NHS. JSC BTA Bank v Ablyazov (No 14) [2018] UKSC 19 concerned the separate tort of conspiracy by unlawful means.
Violence and threats of violence provide a primary example of how the tort operates, as in Tarleton v McGawley [1793] 170 ER 153. The claimant outfitted a ship (The Tarleton) for the purpose of trading with natives living on the coast of Cameroon. The captain of The Tarleton sent a smaller accompanying vessel (The Bannister) off to find customers. A canoe came to The Bannister to establish trade. The defendant, master of The Othello, fired a cannon at the canoe, killing one of its occupants and deterring further trade with The Bannister. The claimant brought a case against the defendant for unlawful interference with his trade. This claim was successful. Modern forms of violence will be a little less overt in their nature (although you can always hope for a cannon-based problem question.)
Fraud and misrepresentation are also covered by this tort, as per National Phonograph Co Ltd v Edison Bell Co Ltd [1908] 1 Ch 335. The claimants supplied phonographs through distributors who agreed not to sell to customers on a suspended list. The defendants were on that list. In order to get around this, they sent two men who used false names and posed as independent dealers to buy the goods from distributors. The distributors would not have sold had they known the truth. The fraudulent misrepresentations undermined the claimants’ distribution arrangements even though the distributors received the price of the goods.
A more modern version of fraud can be seen in Lonrho plc v Fayed [1990] 2 QB 479. Both the claimants and defendants wanted to buy House of Fraser, which owned the London department store Harrods. The claimants had their bid investigated by the Monopolies and Mergers Commission, but alleged that the defendants had misled the directors and the Secretary of State, securing acceptance of their own bid without a reference. The Court of Appeal allowed the claim to proceed. This was a decision on the pleadings, not a finding that fraud had been proved.
In a crossover between the torts of inducing breach and unlawful interference, there is a precedent of breaching contract or threatening breach of contract constituting the required unlawful act. This can be seen in Rookes v Barnard [1964] UKHL 1. The claimant was a draughtsman employed by a third party company, BOAC. He had a disagreement with his union (AESD), and left it. Its officials wanted to maintain a closed shop. The defendants threatened a strike if the claimant wasn’t dismissed (essentially, a threat that the union members would breach their contracts - which included a no-strike clause). The claimant was suspended, and eventually dismissed. He then sued the three officials for intimidation, on the basis that they had threatened an unlawful act (an unlawful strike) with the intention of interfering with his livelihood. This claim was successful. Lord Reid noted that, like a threat of violence, the threat of an unlawful strike was just as much a coercive weapon.
A different question arises in a ‘two-party intimidation’ scenario. For example, a steel supplier with a contract with a car manufacturer might threaten to withhold deliveries in order to get a higher price. This is not the OBG unlawful means tort, which requires interference with a third party. The threat may raise separate questions of intimidation or economic duress. For intimidation, an unlawful threat must coerce the claimant into acting to their detriment. A threat, without more, does not establish liability (Morley v Royal Bank of Scotland plc [2021] EWCA Civ 338).
A crime alone does not establish the unlawful means tort. There must be actionable interference with a third party as described above and an intention to injure the claimant. This can be seen in Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC 173. The claimants alleged that the defendants breached sanctions making it a criminal offence to supply Rhodesia (now Zimbabwe) with oil. The claimants brought a case against them, arguing that this helped the regime in power to survive and therefore caused the sanctions to remain in place for longer, harming the claimant’s business interests in the area. The claim failed. The sanctions legislation gave the claimants no private right to damages, and there was no allegation that the breaches were intended to injure them. This also demonstrates the use of malice as a gatekeeping mechanism for this tort - if intention to harm the claimant was not a prerequisite, then the number of claimants for a given unlawful act could be potentially huge.
Defences
A commercial motive does not by itself justify unlawful means. A defendant may dispute that the means were unlawful at all. The defence considered in Edwin Hill & Partners v First National Finance Corporation above concerns inducing breach of contract.
It should also be noted that trade unions and their members may have statutory immunity from liability on the contractual-interference grounds specified in s.219 when acting in contemplation or furtherance of a trade dispute, provided the conditions of TULRCA 1992, ss. 219-220 and the associated statutory restrictions are satisfied. The protection does not extend to violence or fraud.
Conspiracy
The law recognises situations in which a group of actors come together with the aim of harming the claimant’s business or trade, via unlawful means or otherwise. In a similar rationale to the concept of conspiracy in criminal law, the civil tort of conspiracy allows a claimant to recover for acts done in pursuance of the common design. It is designed to allow a claimant to bring a case against a group of malicious plotters who would otherwise avoid liability, because their individual actions are not in and of themselves tortious, or because only one of them actually took the tortious act. This tort is particularly relevant considering the often complex business structures of modern corporations and financial entities.
Conspiracy to Injure
This tort is essentially an agreement between several actors to act together to injure the claimant’s business interests (which results in damage; mere agreement is not enough). It is key that the conspirators’ actions are aimed at the claimant, rather than merely being a genuine attempt to further their own business interests. In other words, the predominant purpose of the combination must be to injure the claimant. Notably, however, this tort does not necessarily require an illegal act (such as breach of contract or unlawful activities). The tort is essentially one of acting in a legal manner, but in such a way that the predominant aim is clearly economic injury of another, rather than self-profit. It should be noted that this tort is rarely applied and highly controversial, since essentially it imports liability on a group of people for taking perfectly legal actions. In both Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC 173 and Lonrho plc v Fayed [1992] 1 AC 448, the courts confirmed that this tort still exists, but have noted that the bar for finding that a legal business practice is illegitimate is extremely high.
This tort is illustrated in Quinn v Leathem.
Case in Focus: Quinn v Leathem [1901] AC 495, 496
The defendants (Quinn et al.) were the head and officers of a butchers’ union. The claimant (Leathem) was a butcher who employed some non-union members. The union put pressure on the claimant to fire the non-union employees. Leathem offered to pay for his men to be admitted. A union representative said they should be out of work for twelve months. Leathem protested that one man had nine small children to support. The union then put pressure on the butcher to fire his employees and hire those of the union. This involved pressuring the claimant’s wholesale customers to stop trading with him, putting the claimant on blacklists, and paying several of his employees after they left his service. One employee was induced to leave without notice.
This series of actions was held to be conspiracy to injure - the jury found that the defendants had acted together to injure the claimant and had caused him financial loss. Their conduct also included inducing an actual breach of contract.
This can be contrasted with Crofter Hand Woven Harris Tweed Co v Veitch [1942] AC 435. The claimants were independent producers who imported cheaper mainland yarn and had it woven by crofters on Lewis. The Transport and General Workers’ Union represented most of the local mill spinners and the Stornoway dockers. When the mill owners resisted a wage rise, citing competition from mainland yarn, the union instructed dockers not to handle the producers’ yarn or cloth. The claimants thus brought a case against the defendants on the basis of conspiracy to injure. This claim failed - the courts regarded the actions of the defendants to be legitimate, since the predominant object of their actions was to best benefit their members, rather than to harm the claimants.
Thus, as long as nothing unlawful has happened, and no contracts have been breached, and the defendants can show that their predominant purpose was simply to further their own legitimate interests, then no case for conspiracy to injure will arise. This is important - since it allows trade unions to operate without the threat of tortious liability. It is for the claimant to prove a predominant purpose to injure in a lawful means conspiracy.
Conspiracy Using Unlawful Means
Conspiracy using unlawful means is a distinct variant. Here, the claimant must show an agreement or combination of at least two people, an intention to injure the claimant, an unlawful act done in furtherance of their agreement, and loss caused by that act. The injury need not be their predominant purpose, but mere foreseeability of loss is insufficient. The unlawful means must be the instrument by which the loss is caused, not an incidental feature of an otherwise lawful transaction. In JSC BTA Bank v Khrapunov [2018] UKSC 19 an agreement to breach court orders to put assets beyond a creditor’s reach was capable of satisfying this requirement.
An important distinction between this tort and the three-party tort of causing loss by unlawful means (discussed above) was established by the House of Lords in Revenue and Customs Commissioners v Total Network SL [2008] UKHL 19. In that case, the House of Lords held that the ‘unlawful means’ in conspiracy by unlawful means need not be independently actionable by the claimant. This is a broader test than applies to the three-party unlawful means tort under OBG Ltd v Allan, where Lord Hoffmann required that the unlawful means must interfere with a third party’s freedom to deal with the claimant. The alleged VAT carousel fraud was capable of founding the conspiracy claim. The Court of Appeal held that knowledge of the facts making the means unlawful is required, but knowledge of their legal character is not (The Racing Partnership Ltd v Sports Information Services Ltd [2020] EWCA Civ 1300). The extent to which a breach of contract owed to someone else or a breach of foreign law can suffice, and what the defendants must know about unlawfulness, are before the Supreme Court in Massa v Fédération Internationale de l’Automobile (UKSC/2026/0037).
Rookes v Barnard [1964] UKHL 1 (facts above) illustrates the distinction. One of the defendants, a trade union official called Silverthorne, was not employed by BOAC and had no employment contract with it to break. His liability was for participating in the coercive threat. The House of Lords upheld liability in intimidation without requiring proof of a conspiracy.
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