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

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

27 March 2023

Conspiracy is known as one of the “economic torts” in English civil law. Today, these economic torts are frequently pleaded in civil fraud claims. Conspiracy has risen to particular prominence recently.

This article is the first of three articles. To listen to the full series in audio format, please click on the playlist below.

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

There are two types of conspiracy recognised in English law – lawful means and unlawful means conspiracy. We will focus primarily on unlawful means conspiracy as the far more frequently pleaded tort. The law on unlawful means conspiracy is complex, owing in part to the meandering history of the economic torts, so in this part one we discuss the history of the tort and the elements of the cause of action. Part two will consider the practical implications of pleading and defending unlawful means conspiracy, including the kind of evidence involved. Part three will conclude the series with our thoughts on the future of the tort of conspiracy.

History

Allegations of conspiracy in court go back a long way. In the 1844 case of Barnard Gregory v C.F.A. W. Duke of Brunswick and H. W. Vallance 134 E.R. 1178, the claimant, an amateur actor, alleged a conspiracy to prevent him from gaining fame and fortune by arranging for multiple people to “hoot, hiss, groan and yell” during his appearance starring in the title role in a performance of Hamlet in Covent Garden. Regrettably for Mr Gregory, the judge thought it important to be cautious in working out whether the hissing and hooting from the defendants’ box was connected with that from other parts of the theatre. Sadly for Mr Gregory’s dreams of becoming a famous actor, he lost both his case and his application for a re-trial.

Although Mr Gregory’s case might not truly have been a case of the tort of conspiracy as we know it today, the economic torts in general, conspiracy included, were developed considerably between the late 19th century and mid-20th century. This was in part related to the rise of trade unions, the idea being that incitement to industrial action was damaging to the economic interests of relevant companies, and so consideration should be given as to the circumstances in which that damage ought to be actionable as opposed to legitimate behaviour for which union officials should have immunity. However, the various developments that occurred amounted, according to the authors of Clerk & Lindsell on Torts, to “half a century of case law that corresponded to no apparent masterplan”¹.

Following a period of relative quiet, there has been something of a revival of interest in pleading these economic torts in the 21st century. The continuing lack of clarity in the law has meant a number of key cases have made it as far as the House of Lords or Supreme Court, including OBG Ltd v Allan [2007] UKHL 21 (OBG), Revenue and Customs Commissioners v Total Network SL [2008] UKHL 19 (Total), JSC BTA Bank v Ablyazov (No.14) [2018] UKSC 19 (Ablyazov). Most recently, the Court of Appeal gave detailed consideration to the tort of unlawful means conspiracy in The Racing Partnership case (The Racing Partnership Ltd and others v Sports Information Services Ltd [2020] EWCA Civ 1300).

As we move to discuss the current law on the components of unlawful means conspiracy, even these cases have not fully clarified the law; as Lewison LJ said in his dissenting judgment in The Racing Partnership “the so-called economic torts have been considered by the House of Lords and the Supreme Court on a number of occasions in recent years; but it cannot be said with confidence that the law is clear.”

Elements

Notwithstanding the continuing development of the tort, it is helpful to recap the basic elements of unlawful means conspiracy as it stands. To make up a complete cause of action, the claimant must show

“that he has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the defendant and another person or persons to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do so.” (Kuwait Oil Tanker Company SAK v Al-Bader (No.3) [2000] 2 All E.R. (Comm) 271 at [108]).

There are a number of limbs to that definition, and they merit closer inspection. The elements may be broken down as:

The first limb of a conspiracy is that two or more parties form an agreement to injure some other legal person. It has been said that the term “agreement” might be misleading in the tort of conspiracy, as that could conjure up the idea of a formally expressed agreement. Being realistic about the nature of conspiracy, however, that is highly unlikely, and the agreement will be less formal. For that reason, sometimes a different term such as “combination” is used to describe the agreement. The essential point is that this limb of the cause of action can be satisfied by the existence of something more like a tacit understanding between the conspirators and need not be a formal agreement between them. Moreover, although there needs to be an agreement, it is not necessary that all conspirators join it at the same time. It is enough that they all have the same aim in mind and know the central facts.

It is interesting to note that as regards companies and their directors, the doctrine of separate legal personality means that it is considered legally possible for a director to conspire with their company. The position in relation to companies that have only one director is less clear cut, as this could appear in effect to consist of a person conspiring with themselves. It has been pointed out, however, that a director can form a contractual agreement with their company, and so there should not be anything inherently impossible in a director forming a conspiratorial agreement with their company. This would depend on the facts of any particular case and may broaden the availability of unlawful means conspiracy as a cause of action. However, we do not propose to dwell further on the issue here.

The divergence between the crime of conspiracy and the tort is perhaps starkest in this element, which is needed only in the latter. The crimes of statutory conspiracy and conspiracy to defraud are committed by formation of the agreement alone². In contrast, it is an essential element of the cause of action in tort that the conspirators act on their plan and carry out some deliberate act(s) and/or omission(s) to further it.

This limb has been the subject of considerable judicial debate and the meaning is less obvious than might be expected. The term “unlawful means” can encompass a wide variety of acts, and the courts have been reluctant to devise a definitive test, taking the view that it would likely be more hinderance than help.

There is a different economic tort of causing loss by unlawful means, but the term “unlawful means” does not have the same meaning across the two. Indeed, in Ablyazov, the Supreme Court cautioned that “it is dangerous to assume that [apparently common elements of the economic torts] have the same content in each context.” This perhaps supports the view taken by some commentators that the conceptual grouping of the “economic torts” is artificial and not always helpful.

In unlawful means conspiracy, possible unlawful means include commission of another tort, a breach of contract, or a breach of fiduciary duty. Following the decisions in Total and Ablyazov, it has been established that it can also be commission of a crime. The general approach of the court is to adopt a broad interpretation of the term embracing all acts a defendant is not permitted to do, whether by civil or criminal law, provided those acts were instrumental in causing the claimant’s loss. In the final part of this series we will examine more closely the debate on this limb.

The House of Lords’ landmark judgment in Total explains that one should understand the “means” element of “unlawful means” as signifying the causation requirement, that is to say that the unlawful conduct has to be the cause of the harm to the claimant. This is an unsurprising requirement given the role of causation in tort. As Cockerill J put it in King v Stiefel [2021] EWHC 1045 (Comm) “Causation of loss is an essential part of all claims in tort. Where an unlawful means conspiracy is alleged, the loss complained of must have been caused by the unlawful acts complained of.”³ We will return to the issue of causation when discussing the case of The Racing Partnership as this is a key point of current judicial debate for this tort and merits more detailed consideration.

Having stated that commission of another tort can be the unlawful means in an unlawful means conspiracy, it may be worth noting that the tort of negligence cannot fulfil this function⁴. Given that by its very nature negligence cannot be committed deliberately, it would be a nonsense to suggest parties could agree to take concerted action to behave negligently. While an omission can constitute the concerted action, that has to be a deliberate omission and thus cannot be a negligent one.

An unlawful means conspiracy requires that a purpose of the agreement is to injure the claimant. It does not have to be the only or the main purpose (contrasting it with the tort of lawful means conspiracy), but it does have to be amongst the intended outcomes of the conspirators’ planned action(s) and/or omission(s).

The requirement that the conspirators intend harm to the claimant means that an agreement to act together in certain ways for which injury to the claimant is an incidental outcome will not meet this test. There are two important clarifications of this point, however. First, where injury to the claimant is the “other side of the coin” of the intended outcome, this will meet the test of intention to injure the claimant. Thus, an agreement to take concerted action to promote the conspirators’ own interests where that is necessarily at the expense of the claimant is construed as involving an intention to injure the claimant. And second, even if it is not the direct flipside of the intended outcome, if the planned action is inevitably going to involve injury to the claimant, perhaps as unavoidable collateral damage, again this will satisfy the intention to injure requirement. The court is quite prepared to impute an intention that a particular event comes about if it was the obvious and predictable consequence of the defendants’ actions.

Unlike the crime of conspiracy, which is complete when the agreement is formed, not only must there be deliberate action or omission for the tort of unlawful means conspiracy, but the claimant must also suffer harm as a result of the unlawful act. While a handful of torts, such as those in trespass, are actionable per se, unlawful means conspiracy, like the majority of torts, is only actionable if damage has been suffered. Damage in tort is inherently linked with the question of causation, which we also referred to above. As stated, the damage has to result from the unlawful act to be recoverable.

Of course, although we have presented the components of the tort separately to explain how the cause of action is made up, in reality these components are heavily interlinked, and at times attempts to unpack them may have caused more confusion than clarity. The significant recent decision of the Court of Appeal in The Racing Partnership provides a good demonstration of these difficulties, and so we turn to that to conclude this part one.

The Racing Partnership

During attempts by the courts to explain the meaning of the elements of the tort, there has been consideration as to whether it includes a requirement that the defendants know that their action is unlawful. The answer is no, according to the majority judgment of the Court of Appeal in The Racing Partnership, but in giving this answer in his majority judgment Arnold LJ said it raised a “thorny issue of law" and acknowledged the existence of divergent judgments on the point. The detailed examination of the authorities undertaken by the Court of Appeal indicates that there is also support for the contrary view, which was defended in Lewison LJ’s cogent dissenting judgment. It is possible that this is something the Supreme Court would be willing to re-examine in a suitable case in future.

The Racing Partnership decision from the Court of Appeal also contains interesting analysis of the causation requirement and its interaction with the conspirators’ intention and the injury to the claimant. This was necessary to answer the question on appeal whether a particular breach of contract constituted “relevant unlawful means”. This was in issue because the breach of contract pleaded by the appellant had been between the defendant and other parties; the appellant was not a party to the relevant contracts and could not have sued for breach of them or for inducing breach of them. At first instance the judge had found that this was not, therefore, relevant unlawful means. The Court of Appeal disagreed by its majority judgment, but the arguments to the contrary have force. This is another point on which it would therefore be interesting to hear the Supreme Court’s verdict if the opportunity arises.

For the Court of Appeal, resolution of this question turned on a proper understanding of the concept of the unlawful means being the “instrumentality” by which the claimant is harmed, that term appearing to have been introduced by Lord Nicholls in OBG. Arnold LJ found that subsequent judicial discussion of “instrumentality” tended to conflate causation with intention, and that instrumentality refers to the requirement of causation only. Thus the unlawful means needs to be the cause of, and not merely the occasion for, the claimant’s loss, but as to the requirement of intention “it is sufficient that the defendant intends to advance their economic interests at the expense of the claimant’s.” In short, it appears that if it signifies anything, the “instrumentality” requirement is an indicator that causation in the tort of unlawful means conspiracy refers to what is known as “effective causation” rather than “but for” causation. It does not have any significance for the intention requirement, which is met if the defendants intended to harm the claimant.

Concluding remarks

The tort of unlawful means conspiracy is a complex cause of action. This is in large part due to its lengthy development and the different purposes it has served over time. It is possible that the tort will evolve yet further in future cases. In the next part of this series, we will address practical considerations about pleading and evidencing unlawful means conspiracy and defending such claims.

^----------¹23rd ed. at 23-03
²Statutory conspiracy is defined in s.1 Criminal Law Act 1977; conspiracy to defraud is a common law offence.
³Cockerill J made this comment as part of her judgment leading her to strike out the claim for failing to disclose a complete cause of action, causation being one of the missing elements.
⁴See, for example, Maranello Rosso v Lohomij BV [2021] EWHC 2452 (Ch)