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Economic Torts and Labour Law: Old Principles and New Liabilities

Published online by Cambridge University Press:  16 January 2009

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What forms of economic coercion should the law permit in the conflict between labour and capital? This is a fundamental question to ask in any developed economy. It is also hotly disputed, particularly in Britain where, in the last ten years especially, successive governments have attempted to redefine the legality of strike action to reflect their own views of what society should tolerate. As every student of labour law knows, the liberty to strike in Britain has been created by Parliament giving unions and workers a series of immunities from judge-made liabilities, and the scope of that liberty can be altered by expanding or restricting the immunities accordingly. This perhaps suggests a simple control mechanism for adjusting at will the boundary between lawful and unlawful industrial action. But the description is deceptively simple and any such conception is grossly misleading.

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Copyright © Cambridge Law Journal and Contributors 1982

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References

1 See Trade Union and Labour Relations Act 1974 (hereafter T.U.L.R.A.), ss. 13 and 14.

2 [1892] A.C. 25.Google Scholar

3 [1898] A.C. 1. The case affirmed the decision which the House of Lords had reached three years earlier in Bradford Corporation v. Pickles [1895] A.C. 587, where it was held that a lawful use of property did not become unlawful because it was prompted by a malicious or improper motive.Google Scholar

4 [1901] A.C. 495.Google Scholar

5 (1889) 23 Q.B.D. 598, 625626. These words were specifically adopted by Baron Bramwell in the House of Lords.Google Scholar

6 [1901] A.C. 495, 536. 7Google Scholar

7 It was precisely because of this uncertainty that Parliament passed the second limb of s. 3 of the 1906 Trade Disputes Act: see the note by Elias, Patrick on Hadmor Productions Ltd. v. Hamilton [1982] I.R.L.R. 102 at p. 249 of this Journal.Google Scholar

8 See, e.g., Ware and de Freville Ltd. v. Motor Trade Assn. [1921] 3 K.B. 40, 9091Google Scholarper Atkin L.J.; and Smith, Sorrell v. [1925] A.C. 700, 723 per Lord Dunedin; and 748749 per Lord Buckmaster.Google Scholar

9 See Quinn v. Leathern, op. cit., at pp. 531, per Lord Brampton and 537–538 per Lord Lindley. Even before this decision Mr. Justice Holmes had trenchantly criticised this simplistic analysis: see Vegelahn v. Guntner (1896) 44 N.E. 1077, 1080.Google Scholar

10 [1981] 2 All E.R. 456. See Elias and Tettenborn [1981] C.L.J. 230.Google Scholar

11 At p. 464.

13 See now T.U.L.R.A., s. 13 (4).

14 Crofter Hand Woven Harris Tweed Co. Ltd. V. Veitch [1942] A.C. 435. Earlier cases include Reynolds v. Shipping Federation [1924] 1 Ch. 28 and Sorrelt v. Smith [1925] A.C. 700.

15 Lord Diplock, at p. 464. There had been uncertainty on this point in the earlier House of Lords' conspiracy decision, Crofter Hand Woven Harris Tweed Co. v. Veitch [1942] A.C. 435: contrast Lord Thankerton at p. 459 et seq. with Lord Maugham at p. 449et seq.Google Scholar

16 On which, see especially Viscount Maugham at p. 451. See also Hunlley v. Thornton [1957] 1 W.L.R. 321.Google Scholar

17 See Scala Ballroom (Wolverhampton) Ltd. v. Ratcliffe [1958] 1 W.L.R. 1057, where an attempt by the defendants to break a colour bar was held to be a legitimate object. And see the case-note by O. Kahn-Freund (1959) 22 M.L.R. 69Google Scholar

18 The protection afforded to pursuing legitimate interests will sometimes be wider than that given by the statutory immunity (see, e.g., Stratford v. Lindley [1965] A.C. 269), but it is difficult to envisage the converse.Google Scholar

19 Possibly a caveat has to be entered in relation to the law of economic duress (on which see for a valuable, if slightly dated discussion, Goff and Jones, Law of Restitution, 2nd ed., pp. 176–186). That this doctrine has a role to play in labour relations is now clear from the House of Lords' decision in Universe Tankships Inc. of Monrovia V. International Transport Workers' Federation [1982] I.R.L.R. 200. The precise effects of the doctrine are not yet clear, but in certain limited cases it seems that property or money passed under an agreement signed by an employer as a result of economic duress may be recovered by that employer. However, the pressure exerted must be illegitimate. But this need not always involve threatening to do something unlawful: see especially the comments of Lord Scarman: “Duress can, of course, exist even if the threat is one of lawful action: whether it does so depends upon the nature of the demand” (p. 212). So what is lawful in connection with the law of tort may nevertheless vitiate consent in the law of contract.

20 This is clear from Lonrho Ltd. v. Shell Petroleum Co. Ltd. (No. 2) [1982] A.C. 173.

21 (1966) 40 A.L.J.R. 211. For a trenchant criticism of the decision, see Dworkin, and Harari, , “The Beaudesert Decision—Raising the Ghost of the Action upon the Case” (1967) 40 A.L.J. 296.Google Scholar

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23 (1853) 2 E. –Rogers (1979), Chap. 20. For further analysis,Google Scholarsee Wedderburn, The Worker and the Law, 2nd ed. (1971), pp. 345371;Google ScholarHeydon, The Economic Torts, 2nd ed. (1978); and Burns, “Tort Injury to Economic Interests: Some Facets of Legal Response” (1980) 58 Can. Bar Rev. 103. See also Hughes, “Liability for Loss Caused by Industrial Action” (1970) 86 L.Q.R. 181Google Scholar

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29 [1972] Ch. 630.Google Scholar

30 Trade Disputes Act 1906, s. 3.Google Scholar

31 T.U.L.R.A., s. 13 (1), as amended by the Trade Union and Labour Relations (Amendment) Act 1976, s. 3 (2).Google Scholar

32 T.U.L.R.A., s. 13 (1).

33 (1853) 2 E. & B. 216, 232.Google Scholar

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35 See especially pp. 84–85.Google ScholarSee further Royal London Mutual Insurance Society Ltd. v. Williamson (1921) 37 T.L.R. 742.Google Scholar

36 It might even be contended that this is an equitable rather than tortious action and that consequently the union itself could be sued since its immunity in tort (T.U.L.R.A., s. 14) would be inapplicable. If one describes the union officials as parties to a breach of trust, this suggests an equitable liability; but if they are seen as inducers of a breach of duty then, by analogy with inducing a breach of contract, liability ought to be tortious. In Prudential Assurance v. Lorenz itself Plowman J. seemed to assume it was tortious and the policy behind the union immunity suggests that it should be so treated and that technical distinctions ought not to be drawn between equitable and common law liabilities (though arguably this is in fact what Prudential Assurance did). And see in this connection the House of Lords' decision in United Scientific Holdings Ltd. v. Burnley Borough Council [1978] A.C. 904 where they observed that, to use Lord Diplock's phrase, “ the waters of the confluent streams of law and equity have surely mingled now ” (p. 925).Google Scholar

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39 See especially s. 30.

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41 Ss. 221 and 236. Both of these provisions have since been repealed.

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44 Under the Employment Act 1980, s. 10 only the employer can join third parties in proceedings in this way: see the discussion by Patrick Elias, “ Gosing in on the Closed Shop ” (1980) 9 I.L.J. 201, 205. But the Employment Bill 1982 which, at the time of writing, has not yet been enacted, proposes to permit the dismissed employee to join third parties also.Google Scholar

45 As occurred in Rookes v. Barnard [1964] A.C. 112Google Scholar

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47 Furthermore, the scope of conspiracy to use unlawful means has been very significantly limited by the House of Lords in the Lonrho case [1982] A.C. 173. Their Lordships surprisingly held that even for conspiracy to use unlawful means there is no liability if the predominant purpose of the defendants is to protect their own interests. In this respect, conspiracy to use unlawful means has been equated with conspiracy to injure.Google Scholar

48 [1952] Ch. 646.Google Scholar

49 These include J. T. Stratford & Son Ltd. v. Lindley [1975]Google Scholar A.C. 269 and Torquay Hotel Co. Ltd. v. Cousins [1969] 2 Ch. 106.Google Scholar Following the latter case, liability will attach not merely to indirectly procuring a breach of contract but also to indirectly interfering with its performance, providing unlawful means are used. In Daily Mirror Newspapers Ltd. V. Gardner [1968] 2 Q.B. 762, Lord Denning even flirted with the idea of imposing liability where the means employed are lawful, but in Torquay Hotel he subsequently reasserted the orthodox position that unlawful means are required.Google Scholar

50 [1964] A.C. 1129. For comment, see Hamson [1964] C.L.J. 159; Weir [1964] C.L.J. 225; Wedderburn (1964) 27 M.L.R. 257.Google Scholar

51 See especially Salmond on the Law of Torts, 13th ed. (1961), p. 697. See also Hamson [1962] C.L.J. 189.Google ScholarSee further Cooper v. Miller [1938] I.R. 749Google Scholar and Riordan v. Butler [1940] I.R. 347.Google Scholar

52 See especially Wedderburn (1964) 27 M.L.R. 257, 263267.Google Scholar

53 Furthermore, although a specific immunity was provided in 1974 to prevent a breach of contract from constituting unlawful means (see T.U.L.R.A., s. 13 (3) (b)) this has since been repealed by the Employment Act 1980, s. 17 (8).Google Scholar

54 See, e.g., Lord Lindley in Quinn v. Leathern [1901] A.C. 495, 537538;Google Scholar Romer L.J. in Giblan V. National Amalgamated Labourers' Union [1903] 2 K.B. 600, 619;Google Scholar and Lord Sumner in Sorrell v. Smith [1925] A.C. 700, 737.Google Scholar

55 [1964] A.C. 1129, 11681169.Google Scholar

56 [1968] 2 Q.B. 762.Google ScholarFor a critique of this decision, see Winfield and Jolowicz, op. cit., pp. 494–495. See further Guest and Hoffman (1968) 84 L.Q.R. 310.Google Scholar

57 Ibid., at p. 783. See also Torquay Hotel Co. Ltd. [1969] 2 Ch. 106, 139.

58 [1971] 1 W.L.R. 1676.Google Scholar

59 [1972] Ch. 105.Google Scholar

60 [1982] I.C.R. 114.Google Scholar

61 [1925] A.C. 700.Google Scholar

62 Ibid., at p. 719.

63 [1964] A.C. 1129, 1210.Google Scholar

64 See further Winfield and Jolowicz, op. cit, Chap. 8. See also, Friche, “ The Juridical Nature of the Action upon the Statute ” (1970) 76 L.Q.R. 240Google Scholar and Glanville Williams “ The Effect of Penal Legislation in the Law of Tort ” (1960) 23 M.L.R. 233.Google Scholar

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66 Ibid., at pp. 185–186.

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68 [1972] Ch. 105.Google Scholar

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70 [1908] 1 Ch. 335.Google Scholar

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72 There are also various dicta suggesting that the unlawful means need not be independently actionable. A notable observation in the context of labour law is that of Lord Wright in the Crofter case when he said at p. 462 that unlawful means would include breaches of the Conspiracy and Protection of Property Act 1875 and the now repealed Trade Disputes and Trade Unions Act 1927.Google Scholar In addition, there is Commonwealth authority where liability has rested upon means not independently actionable. See International Brotherhood of Teamsters v. Therien (1960) 22 D.L.R. (2d) 1.Google Scholar

73 [1969] 2 Ch. 106, 139.Google Scholar

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76 See ss. 62 and 53 respectively.

77 See, e.g., Prices and Incomes Act 1966, s. 16 (5).Google Scholar

78 On this basis Lord Diplock is surely correct in Lonrho to say that the availability of an action in tort for breach of statute must “ depend on the scope and language of the statute ” [1982] A.C. 173, 187.Google Scholar

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82 At p. 739

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84 This does not satisfactorily explain all the cases where certain unlawful acts have been held not to constitute unlawful means. In Chapman v. Honig [1963] 2 Q.B. 502 the Court of Appeal (with Lord Denning dissenting) held that a contempt of court would not constitute unlawful means but this decision conflicts with the later case of Acrow Automation Ltd. v. Rex Chainbelt Inc. (in which it was not cited) and might now be considered to be wrong. Again, it has been held in the Mogul case, op. cit., that actions in restraint of trade are not unlawful means, but possibly this can be explained on the basis that such acts are void and unenforceable rather than unlawful.Google Scholar

85 Trade Disputes Act 1906, ss. 1 and 3 respectively.Google Scholar

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91 Indeed in Rookes v. Barnard Lord Devlin left open the question “ whether or not malicious interference by a single person with trade, business or employment is or is not a tort known to the law ” ( [1964] A.C. 1129, 1215).Google Scholar

92 [1982] 2 W.L.R. 322.Google Scholar

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94 Ibid. His Lordship seems to have taken Allen v. Flood for granted and simply assumed that there could be no liability for the commission of otherwise lawful acts save in relation to conspiracy to injure which is specifically protected by s. 13 (4).

95 [1982] I.R.L.R. 198.Google Scholar

96 [1982] 2 W.L.R. 322, 337 confirming David v. Johnson [1979] A.C. 264.Google Scholar

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1 See, e.g., Lord Denning's judgments in Morgan v. Fry [1968] Q.B. 710, 728–729Google Scholar and Torquay Hotel Co. Ltd. v. Cousins [1969] 2 Ch. 106, 139140.Google Scholar And see now Lord Diplock's observations in Hadmor [1982] 2 W.L.R. 322, 335–336.Google Scholar

2 [1976] I.C.R. 274, 290.Google Scholar

3 [1982] 2 W.L.R. 322, 335–336.Google Scholar

4 S. 17 (8).

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8 (1868) L.R. 6 Eq. 551, 558–559.Google Scholar

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12 [1896] 1 Ch. 811, 826.Google Scholar

13 [1978] A.C. 435.Google Scholar

14 See, at pp. 492–493, per Viscount Dilhorne; and 506, per Lord Edmund-Davies.

15 Contrast Lord Diplock's judgment in Gouriet where he appears to accept that an individual can restrain the infringement of a private right but limits his comments to a situation where the right is created by the statute itself (p. 499).

16 e.g., both Viscount Dilhorne and Lord Edmund-Davies refer to the Springhead Spinning case, which uses the language of proprietory rights as authority for the view that private rights are protected.

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30 Their duties are found in such Acts (together with subsequent amendments) as the Gas Act 1948, Electricity Act 1947, Transport Act 1947 and Civil Aviation Act 1946.Google Scholar

31 Coal Industry Nationalisation Act 1946, s. 1 (1) (a).Google Scholar

32 Education Act 1944, s. 8 (1).Google Scholar

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35 Ibid., at pp. 504–505, per Lord Denning; 507–508, per Eveleigh L.J.: and 512, per Sir Stanley Rees.

36 Ibid., at p. 505.

37 Liability for mere interference was suggested by Lord Denning in Meade at p. 505 and in Associated Newspapers Group v. Wade [1979] I.C.R. 664, 696.Google Scholar

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44 The Post Office Act 1969, s. 9 provides a general duty on the P.O. to provide postal services throughout the country.Google Scholar

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48 [1979] I.C.R. 664, 696.Google Scholar

49 See Universe Tankships Inc. of Monrovia V. International Transport Workers Federation [1982] I.R.L.R. 200.Google Scholar

50 See, e.g., the Post Office Act 1969, s. 9 (4); the Iron and Steel Act 1975, s. 2 (1); and the Aircraft and Shipbuilding Industries Acl 1977, s. 2 (10).Google Scholar

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52 In the latter type of case, the courts will permit an action to be brought where, notwithstanding the existence of the separate remedy, the plaintiff alleges malfeasance or ultra vires in the performance of the duty. See, e.g., Bradbury v. Enfield London Borough Council [1967] 1 W.L.R. 1311.Google Scholar

53 See the suggestion by Davies and Freedland, Cases and Materials in Labour Law, pp. 607–608.

54 The most recent consideration was in the Government's Green Paper, Trade Union Immunities, Cmnd. 8128 (1981).Google Scholar

55 See Wedderburn, “ Industrial Relations and the Courts ” (1980) 9 I.L.J. 65. See further, Wedderburn, The Worker and the Law, 2nd ed., pp. 401–406.Google Scholar

56 Wedderburn (1980) 9 I.L.J. 65, 82–83.Google Scholar

57 Lewis and Simpson, Striking a Balance: The Employment Act 1980 (1981), pp. 226–229.Google Scholar

58 Though of course it may well be thought desirable to introduce a principle that individual employment contracts are not broken when the right to strike is exercised.