Economic torts in English law refer to a species of civil wrong which protects the economic wealth that a person will gain in the ordinary course of business. Proving compensation for
pure economic loss, examples of an economic tort include interference with economic or business relationships.
Overview
Economic torts protect people from interference with their trade or business. The area includes the doctrine of
restraint of trade and has largely been submerged in the twentieth century by statutory interventions on collective
labour law, modern
antitrust or
competition law, and certain laws governing
intellectual property, particularly
unfair competition law. The "absence of any unifying principle drawing together the different heads of economic tort liability has often been remarked upon."[1]
The principal torts can be listed as
passing off,
injurious falsehood and
trade libel (see also
Food libel laws),
conspiracy, inducement of
breach of contract,
tortious interference (such as interference with economic relations or unlawful interference with trade), and watching and besetting. These torts represent the common law's historical attempt to balance the need to protect claimants against those who inflict economic harm and the wider need to allow effective, even aggressive, competition (including competition between employers and their workers).
Two cases demonstrated economic tort's affinity to competition and labour law. In Mogul Steamship Co Ltd v McGregor, Gow & Co[2] the plaintiffs argued they had been driven from the Chinese tea market by a 'shipping conference', that had acted together to underprice them. But this
cartel was ruled lawful and "nothing more [than] a war of competition waged in the interest of their own trade."[3] Nowadays, this would be considered a criminal cartel.
Several of the economic torts in English law, in particular inducing breach of contract and "tortious interference" (otherwise known as causing loss by unlawful means), have been reviewed and clarified by the House of Lords in the 2007 case of OBG v Allan.[8]
South Wales Miners’ Federation v Glamorgan Coal Co Ltd [1905] AC 239, “It would be idle to sue the workmen, the individual wrong-doers, even if it were practicable to do so. Their counsellors and protectors, the real authors of the mischief, would be safe from legal proceedings.”
Quinn v Leathem [1901] AC 495, at 510, Lord Macnaghten “a violation of legal right committed knowingly is a cause of action ... it is a violation of a right to interfere with contractual relations recognised by law if there be no sufficient justification for the interference.”
Emerald Construction v Lowthian [1966] 1 WLR 691, Lord Denning MR, “if the officers deliberately sought to get this contract terminated, heedless of its terms, regardless whether it was terminated by breach or not, they would do wrong.”
British Motor Trade Association v Salvadori [1949] Ch 556, Roxburgh J, “in my judgment, any active step taken by a defendant, having knowledge of the covenant, by which he facilitates a breach of covenant is enough.”
Merkur Island Shipping v Laughton [1983] 2 AC 570, Lord Diplock, "all prevention of due performance of a primary obligation ... even though no secondary obligation to make monetarycompensation thereupon came into existence."
Glamorgan Coal Company v South Wales Miners Federation [1903] 2 KB 545, Romer LJ, “I think that regard might be had to the nature of the contract broken; the position of the parties to the contract; the grounds for the breach; the means employed to procure the breach; the relation of the person procuring the breach to the person who breaks the contract; and I think also to the object of the person in procuring the breach.” Lord James, [1905] AC 238 at 252 “The fact that their motives were good in the interests of those they moved to action does not form any answer to those who have suffered from the unlawful act.”