8.2 Economic Torts Lecture

Tort law provides a framework for dealing with negligent or intentional acts done against a person’s business or livelihood. Harsh business practices alone, however, are not enough to form the basis of a tort, Mogul Steamship Co Ltd v McGregor, Gow & Co [1889].

Inducing a Breach of Contract

Tort law can provide an action against a third party for persuading one party to a contract to breach it. The root of the tort can be found in Lumley v Gye [1853].

Malice

The tort requires malice on the part of the defendant. The defendant must both know that they are affecting the discharge of a contract, and intend to do so.

A careless inducement will not suffice, Cattle v Stockton Waterworks Co [1975]. However, intention does not need to be particularly concerted, Torquay Hotel Co Ltd v Cousins [1969].

There must be more than knowledge on the part of the defendant; there should be evidence that their primary aim was to cause a breach of contract, OBG v Allen [2007]. However, knowledge of the contract itself does not need to be detailed, JT Stratford & Son Ltd v Lindley [1965].

This tort applies to cases where a party is induced away from a contract they were already in, Allen v Flood [1898].

Damage

The claimant must show that some loss has stemmed from the action, though this need not be quantifiable, Exchange Telegraph Co v Gregory & Co [1896].

Defences

A defendant may argue that their actions were justified, though the standard is high, South Wales Miners’ Federation v Glamorgan Coal Co Ltd [1905].

Causing Loss by Unlawful Means

It is also a tort to interfere with a claimant’s trade using unlawful means. The defendant must have acted unlawfully in their interference, and have done so with the intent to injure the claimant.

Intention to Harm

The intention requirement simply means that the harm is intentional. This is satisfied even when the defendant would rather the claimant not be harmed, but where the harm is the obverse side of the coin from gain to the defendant, Douglas v Hello! Ltd (No 3) [2005].

Unlawful Means

This includes violence and threats of violence, Tarleton v McGawley [1793]; fraud and misrepresentation, National Phonograph Co Ltd v Edison Bell Co Ltd [1908]; breaching or threatening a breach of contract, Rookes v Barnard [1964].

Defences

The only time an unlawful act may be justified is where the defendant had a pre-existing legal right which equals or overrides the right he is interfering with, Edwin Hills & Partners v First National Finance Cop.

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.

Conspiracy to Injure

This tort is an agreement between several actors to act together to injure the claimant’s business interests, and which results in damage. The actions must be aimed at the claimant, with malice. However, no illegal act is required. The tort is rarely applied and controversial, Lonrho v Shell, Quinn v Leathem [1901].

Conspiracy Using Unlawful Means

Where a group of actors conspire to use unlawful means to inflict economic harm upon the claimant, liability here will arise, Rookes v Barnes.


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