6.14 The tort of conspiracy

The tort of conspiracy can suitably be divided into two subcategories: conspiracy by lawful means and conspiracy by unlawful means. Both these types of conspiracy involve two or more people combining to cause the plaintiff economic loss. Before discussing these two types of conspiracy further, it is first necessary to observe the difference between the tort of conspiracy and the crime of conspiracy. As explained by Fox LJ in Midland Bank Trust Co Ltd v Green (No. 3):^[1] “The essence of the crime is agreement – execution of the agreement is not necessary. The position is quite different in the law of tort. In tort … although the agreement is necessary, intention to injure and actual injury are also both necessary”. Thus, Fox LJ makes clear that, for an action in the tort of conspiracy to be successful, the plaintiff must show that the parties to the conspiracy intended to cause the plaintiff economic loss. As far as intention is concerned, it is to be noted that the plaintiff bears the burden of proving that the defendants intended to cause the plaintiff economic loss. Further, Fox LJ’s statement makes clear that the plaintiff must also demonstrate that actual economic loss was in fact suffered as a result of the conspiracy.

In R & The Attorney-General of the Commonwealth v Associated Northern Collieries,^[2] Isaacs J discussed how one can identify a case involving conspiracy:

Community of purpose may be proved by independent facts, but it need not be. If the other defendant is shown to be committing other acts, tending to the same end, then though primarily each set of acts is attributable to the person whose acts they are, and to him alone, there may be such a concurrence of time, character, direction and result as naturally to lead to the inference that these separate acts were the outcome of pre-concerted, or some mutual contemporaneous engagement, or that they were themselves the manifestations of mutual consent to carry out a common purpose, thus forming as well as evidencing a combination to effect the one object towards which the separate acts are found to converge.^[3]

If the tort of conspiracy is established, the plaintiff can be awarded damages. Once the court has established that the plaintiff has suffered some actual financial loss, such damages may cover loss of income or profits, costs associated with identifying the parties to the conspiracy, expenses associated with salvaging business affected relations etc. Furthermore, the court may grant aggravated and/or exemplary damages.

Where appropriate, an injunction can be granted against the behaviour constituting the tort of conspiracy. Perhaps the most obvious advantage for the plaintiff in taking an action in conspiracy (whether it is an action in conspiracy by lawful means or an action in conspiracy by unlawful means) is that, if the tort of conspiracy is established, all parties to the conspiracy are viewed as joint tortfeasors.

Finally, before examining the two types of conspiracy in more detail, it is to be noted that it now seems established that a wide range of types of parties, combining to cause the plaintiff economic loss, can be the parties to a conspiracy, including: spouses conspiring together,^[4] a trade union and its members conspiring together;^[5] and a board of directors conspiring against their company.^[6] In a logical (though curious) extension of the well-known corporate veil principle in Salomon v Salomon & Co,^[7] even a one-man company and the person running the company may conspire together.^[8]

6.14.1 Conspiracy by lawful means

In Crofter Hand Woven Harris Tweed Co Ltd v Veitch,^[9] the defendants were union officials. These union officials had instructed some of their members, who worked in the docks, not to handle imported yarn. The dock workers were able to follow the instructions without breaking their contracts. The plaintiffs in the case were manufacturers of a particular type of cloth and relied upon the import of yarn. The Court held that the plaintiffs could not succeed in their action for conspiracy even though they clearly were suffering economic loss. The reason for this decision was that the predominant purpose of the conspiracy was the lawful protection or promotion of the conspirators’ lawful interest – in this case, the union officials’ action was motivated by the desire to obtain higher wages for the employees of the mills competing with those mills that relied on imported yarn. In negotiating with the mill owners who used locally produced yarn, they had been told that increased wages were impossible in the light of the competitors’ import of cheap yarn.

This case highlights the difficulty in succeeding in an action for conspiracy by lawful means – as long as the defendants can point to some non-neglectable lawful interest, it will always be difficult to convince the court that the tort of conspiracy by lawful means has been committed. In other words, as far as the tort of conspiracy by lawful means is concerned, justification is an effective defence.

6.14.2 Conspiracy by unlawful means

Where the acts carried out as part of the conspiracy are crimes, torts, violations of statutes, or acts in breach of a contract, when looked at in isolation (i.e., independently from the tort of conspiracy), the conspiracy is one by unlawful means.

Essentially, the difference between conspiracy by lawful means and conspiracy by unlawful means is that justification is not an effective defence in relation to the tort of conspiracy by unlawful means. As pointed out by Lord Bridge:

when conspirators intentionally injure the plaintiff and use unlawful means to do so, it is no defence for them to show that their primary purpose was to further or protect their own interests; it is sufficient to make their action tortuous that the means used were unlawful.^[10]