A guide to the tort of conspiracy in the 21st century – part three: where next?

This is the final article in this three part series. To listen to the full series in audio format, please click on the playlist below.

Read the articles in this series or view in one PDF.

• A guide to the tort of conspiracy in the 21st century – part one: history and elements
• A guide to the tort of conspiracy in the 21st century – part two: strategy and practicalities

As we explained in part one of this series, the “economic torts”, including unlawful means conspiracy, have developed over 100 years of case law. Commentators have observed that these developments have, perhaps inevitably, not adhered to any particular plan. In granting permission to appeal the judgment in The Racing Partnership¹, the Supreme Court had indicated a willingness to look again at the tort of unlawful means conspiracy. Although it appears that appeal will not now proceed, it may be that the appeal courts will step in again the next time the law of this tort is in issue. It would be helpful to receive a Supreme Court judgment to settle the outstanding questions of law, and so perhaps the associated issues of policy.

The Court of Appeal’s decision in The Racing Partnership has left the door open to rather broad use of this tort, which has experienced a recent increase in popularity as a cause of action. If the “unlawful means” in a claim for unlawful means conspiracy can be a breach of a contract (or other wrong) that is not itself relevant to the claimant, this creates scope for claimants to sue in any situation where they are adversely affected by a breach of contract that is otherwise unconnected to them if two or more defendants collaborated in the breach. Similarly, if the alleged conspirators do not need to realise that their conduct is unlawful, there may be few constraints on the bounds of the tort. This may not be desirable and seems to emphasise the tension between the tort of unlawful means conspiracy and the tort of causing loss by unlawful means. Such an expansive tort of conspiracy might also run contrary to the general policy of the courts to keep the economic torts narrow and leave restrictions on what is fair or unfair commercial activity for Parliament to set.

Knowledge of unlawfulness

As we explained in part one, a significant point of difference between the High Court and Court of Appeal decisions in The Racing Partnership was whether the conspirators needed to know that their actions were unlawful. The Court of Appeal found by a majority of two to one that knowledge of the unlawfulness is not required, although previous cases on this point were in conflict. Having chosen to follow the authorities stating that knowledge is not required, the majority judgment recapped the policy arguments that had been put to it on this point. The three main policy arguments in favour of a requirement for knowledge were as follows.

1. Knowledge of the unlawfulness ought to be required so that the unlawful means conspiracy tort did not become too broad. The argument ran that as the tort does not require a predominant intention to injure the claimant, if it also does not require knowledge of unlawfulness then it becomes much too broad and affords a cause of action to claimants who ought not to have one. However, though sympathetic to the idea the tort should not become too broad, the Court of Appeal found there was little support in the authorities for the idea that knowledge of unlawfulness was the appropriate limit.
2. If knowledge is not required for unlawful means conspiracy, the tort of inducing breach of contract becomes redundant. Inducing breach of contract does require the defendant to have knowledge. If unlawful means conspiracy does not require knowledge, then it is easier to frame a claim as an unlawful means conspiracy between the inducer and the contract-breaker, and there will be little benefit to pleading inducement of breach of contract. The majority rejected this point and did not agree with the argument that most cases of inducing breach of contract could be reframed as unlawful means conspiracies.
3. Even though knowledge is not required for criminal conspiracy, it ought to be required for the civil law infringement of private rights, as the criminal law is imposed for public benefit whereas legal duties in private torts are specific to particular relationships. The majority in the Court of Appeal, however, could not see why this should make a difference.

The differing majority and dissenting judgments on the meaning and weight to be afforded to the various previous cases on the knowledge question show that it is not obvious what should be inferred from them. As the Court of Appeal acknowledged, however, an appeal court is both permitted and required to choose between authorities if they are genuinely conflicting, so it was open to them to decide this point as they saw fit. This appears prime territory, therefore, for consideration by the Supreme Court in a suitable case.

If it is right that the authorities are in conflict and a decision must be made, the arguments based on policy, that the unlawful means conspiracy tort needs to be kept within reasonable bounds and should not become an "easy" cause to plead at the expense of other torts, have force. Given that the crime and the tort of conspiracy are so divergent, it seems reasonable that there need be no assumption of commonality on the knowledge question either. Indeed, as Fox LJ explained in Midland Bank Trust Co Ltd v Green (No. 3) [1982] Ch. 529 the crime and the tort of conspiracy have not developed in a way “so close that constituents of the one should be regarded as being likely to be applicable to the other.” In that case the question was whether the inability of husband and wife to conspire together in the eyes of the criminal law should be available as a defence to the tort of conspiracy, to which Fox LJ said “the two forms of conspiracy are so different that there is no logical reason for asserting that the immunity given in the case of crime ought as a matter of principle to be extended to the tort.”

Relevant unlawful means and alignment with other economic torts

The other debated conclusion of the Court of Appeal in The Racing Partnership is the ambit of relevant unlawful means. It is helpful to review the tort of causing loss by unlawful means in this context. As we noted earlier in this series, the meaning of unlawful means is different as between these two torts, and the courts have cautioned against assuming commonality between them. Nevertheless, the careful examination to which the topic has been subjected by the courts is instructive.

In Secretary of State for Health and another v Servier Laboratories Ltd and others [2021] UKSC 24 (Servier), the Supreme Court had the opportunity to review the tort of causing loss by unlawful means and to confirm its requirements, 14 years on from OBG². The Supreme Court examined Lord Hoffman’s judgment from OBG in detail, explaining that he had been concerned to make sure the tort was not expanded beyond reasonable bounds. This was achieved “through giving a narrow rather than a wide meaning to unlawful means” and in Lord Hoffman’s view “could not satisfactorily be done by applying principles of causation or by adopting a narrow meaning of intention.”³

For this reason, the tort of causing loss by unlawful means requires that the unlawful means used by the defendant has affected the claimant’s ability to deal with the relevant third party (the dealing requirement). For example, in RCA Corpn v Pollard [1983] Ch 135, the record company RCA had the exclusive right bestowed by the estate of Elvis Presley to exploit Presley’s records. RCA had no cause of action against a bootlegger making Presley records without permission of the Presley estate, because Pollard’s actions had no effect on RCA’s relationship with the Presley estate. That would be a matter for the Presley estate and the bootlegger only.

In OBG, Lord Hoffman had rejected the idea of using causation to place a suitable restriction on the bounds of the tort because it would not be adequate: “If a trader secures a competitive advantage over another trader by marketing a product which infringes someone else’s patent, there is a causal relationship between the wrongful act and the loss which the rival has suffered. But there is surely no doubt that such conduct is actionable only by the patentee.”⁴

Intention was also an inadequate restriction and one which could lead to difficulty. Lord Hoffman thought there was “danger” in “giving a wide meaning to the concept of unlawful means and then attempting to restrict the ambit of the tort by giving a narrow meaning to the concept of intention. The effect is to enable virtually anyone who really has used unlawful means against a third party in order to injure the plaintiff to say that he intended only to enrich himself, or protect himself from loss.”⁵

As Lady Hale then noted in her concurring judgment, this restriction is “consistent with legal policy to limit rather than to encourage the expansion of liability in this area.” Lady Hale said that Parliament was willing and able to legislate to decide what is fair and unfair commercial activity, and that this “can involve major economic and social questions which are often politically sensitive and require more complicated answers than the courts can devise.”⁶

For these reasons, upholding the dealing requirement, the Supreme Court in Servier said it “performs the valuable function of delineating the degree of connection which is required between the unlawful means used and the damage suffered. This is particularly important in relation to a tort which permits recovery for pure economic loss and, moreover, by persons other than the immediate victim of the wrongful act…The dealing requirement also minimises the danger of there being indeterminate liability to a wide range of claimants.”⁷

These comments are insightful in light of the difficulties some commentators have observed with the decision of the Court of Appeal in The Racing Partnership. As we explained in part one of this series, in The Racing Partnership the relevance of the unlawful means turned on whether it was the “instrumentality” by which the claimant was harmed. It was said that there had been confusion over whether this mean intention or causation, and it ought to be construed as denoting the causation requirement. However, whether “instrumentality” means intention or causation, if Lord Hoffman was right in OBG, then his criticisms of relying on either intention or causation to keep the tort of causing loss by unlawful means within reasonable bounds might readily be transferable to the tort of unlawful means conspiracy. It may thus be that the idea of the “instrumentality” by which the claimant is harmed cannot bear the weight needed to prevent the tort getting out of hand.

In The Racing Partnership, the unlawful means was breach of contract as between the defendant and third parties, but those contracts had no relevance to the claimant other than that the defendant’s breach led to the claimant’s loss. If this had been a case in causing loss by unlawful means, rather than conspiracy, then the reasoning of OBG would have applied and this could not be relevant unlawful means. However, following the majority in the Court of Appeal, the tort of unlawful means conspiracy is not currently subject to a restriction equivalent to that in OBG.

As some commentators have noted⁸ it is possible that the reason why unlawful means in conspiracy is not confined to unlawful means that would be actionable by the relevant third party is that if that restriction were in place, there would be no role for the tort of conspiracy at all because it would collapse into secondary liability (also known as joint tortfeasance). The restriction must therefore be rejected because conspiracy is supposed to found primary liability for the conspirators, whereas joint tortfeasance involves secondary liability. It is thus a matter of policy whether it is more important to restrict the ambit of the tort, or to prevent it from collapsing into joint tortfeasance. Lord Sales has argued extrajudicially that there is “no need or justification for an independent tort of conspiracy” and that between them, the wrongs of causing loss by unlawful means, and of accessory liability cover all the wrongs that the law needs to deal with.⁹ We express no view on the right conclusion here, but the debate remains very much alive.

The future

One might hope that this persistent confusion will be resolved by the courts and clear policy decisions will be taken as to what conduct should or should not be actionable. In Servier, Lord Sales noted the finding in Total that “unlawful means” is different as between the two torts and said that this had “potentially resurrected issues which the majority in OBG may have hoped they had laid to rest regarding the nature of the so-called 'economic torts' and what sort of means may qualify as 'unlawful means'".¹⁰ However, Lord Sales agreed with Lord Hamblen that Servier was not the case in which to resolve that issue. It would be welcome news for parties grappling with these uncertainties if another case were to provide the opportunity to do so.

For now, the decision in The Racing Partnership means the ambit of the tort of unlawful means conspiracy is very broad. We can therefore expect to see it pleaded with greater frequency. However, the ongoing debate on the questions of law raised means that further appeals are also likely. Given the willingness of the Supreme Court to hear The Racing Partnership, we may infer that it might well be willing to hear another unlawful means conspiracy case when the opportunity arises.

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¹The Racing Partnership Ltd and others v Sports Information Services Ltd [2020] EWCA Civ 1300
²OBG Ltd v Allan [2007] UKHL 21, referred to in part one of this series.
³Servier, per Lord Hamblen at [61]
⁴OBG per Lord Hoffman at [58]
⁵OBG per Lord Hoffman at [135]
⁶OBG per Lady Hale at [306]
⁷Servier per Lord Hamblen at [94] – [95]
⁸See Winfield and Jolowicz on Tort, 19th edn. Sweet & Maxwell: London 2014 at 19-047
⁹Intentional harm, accessories and conspiracies, Paul S. Davies and Sir Philip Sales, L.Q.R. 2018, 134(Jan) 69 - 93
¹⁰Servier per Lord Sales at [102]