Tortious interference

Case law

An early (perhaps the earliest) instance of recognition of this tort occurred in Garret v Taylor, 79 Eng. Rep. 485 (K.B. 1620). In that case, the defendant drove customers away from the plaintiff's quarry by threatening them with mayhem and also threatening to "vex [them] with suits". The Court of King's Bench said that "the defendant threatened violence to the extent of committing an assault upon ... customers of the plaintiff ... whereupon 'they all desisted from buying'." The court therefore upheld a judgment for the plaintiff.

In a similar case, Tarleton v McGawley, 170 Eng. Rep. 153 (K.B. 1793), the defendant shot from its ship, Othello, off the coast of Africa upon natives while "contriving and maliciously intending to hinder and deter the natives from trading with" plaintiff's rival trading ship, Bannister. This action caused the natives (plaintiff's prospective customers) to flee the scene, depriving the plaintiff of their potential business. The King's Bench held the conduct actionable. The defendant claimed, by way of justification, that the local native ruler had given it an exclusive franchise to trade with his subjects, but the court rejected this defense.

The tort was described in the case of Keeble v Hickeringill (1707) 103 Eng. Rep. 1127, styled as a "trespass on the case". In that case, the defendant had used a shotgun to drive ducks away from a pond that the plaintiff had built for the purpose of capturing ducks. Thus, unlike the foregoing cases, here the actionable conduct was not directly driving the prospective customers away, but rather eliminating the subject matter of the prospective business. Although the ducks had not yet been captured, the Justice Holt wrote for the court that "where a violent or malicious act is done to a man's occupation, profession, or way of getting a livelihood, there an action lies in all cases." The court noted that the defendant would have the right to draw away ducks to a pond of his own, raising as a comparison a 1410 case in which the court deemed that no cause of action would lie where a schoolmaster opened a new school that drew students away from an old school.

The application of the above has since been modified in English law. In OBG v Allan [2008] 1 AC 1, wrongful interference, the unified theory which treated causing loss by unlawful means as an extension of the tort of inducing a breach of contract, was abandoned; inducing breach of contract and causing loss by unlawful means were two separate torts. Inducing a breach of contract was a tort of accessory liability, and an intention to cause a breach of contract was a necessary and sufficient requirement for liability; a person had to know that he was inducing a breach of contract and to intend to do so; that a conscious decision not to inquire into the existence of a fact could be treated as knowledge for the purposes of the tort; that a person who knowingly induced a breach of contract as a means to an end had the necessary intent even if he was not motivated by malice but had acted with the motive of securing an economic advantage for himself; that, however, a breach of contract which was neither an end in itself nor a means to an end but was merely a foreseeable consequence of a person's acts did not give rise to liability; and that there could be no secondary liability without primary liability, and therefore a person could not be liable for inducing a breach of contract unless there had in fact been a breach by the contracting party.

Acts against a third party counted as unlawful means only if they were actionable by that third party if he had suffered loss; that unlawful means consisted of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which was unlawful as against that third party and which was intended to cause loss to the claimant, but did not include acts which might be unlawful against a third party but which did not affect his freedom to deal with the claimant. Strict liability for conversion applied only to an interest in chattels and not to chooses in action; this was too radical to impose liability for pure economic loss on receivers who had been appointed and had acted in good faith. This also left open the position where they breached the duty of good faith.

Typical examples

1. Tortious interference of business – When false claims and accusations are made against a business or an individual's reputation in order to drive business away.
2. Tortious interference of contract – When an individual uses "tort" (a wrongful act) to come between two parties' mutual contract.

Striking

In the United Kingdom, a trade union encouraging or facilitating workers to take strike action commits tortious interference with the employees' contracts of employment, unless the action is conducted in accordance with Part V of the Trade Union and Labour Relations (Consolidation) Act 1992, as amended.

Elements

Although the specific elements required to prove a claim of tortious interference vary from one jurisdiction to another, they typically include the following:

1. The existence of a contractual relationship or beneficial business relationship between two parties.
2. Knowledge of that relationship by a third party.
3. Intent of the third party to induce a party to the relationship to breach the relationship.
4. Lack of any privilege on the part of the third party to induce such a breach.
5. The contractual relationship is breached.
6. Damage to the party against whom the breach occurs.

The first element may, in employment-at-will jurisdictions, be held fulfilled in regards to a previously unterminated employer/employee relationship.

In California, these are the elements of negligent interference with prospective economic advantage, which the plaintiff must establish:

1. an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff;
2. the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship;
3. the defendant was negligent; and
4. such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship.

Some cases add that a defendant acts negligently only if the defendant owes the plaintiff a duty of care.

California and most jurisdictions hold that there is a privilege to compete for business. "Under the privilege of free competition, a competitor is free to divert business to himself as long as he uses fair and reasonable means. Thus, the plaintiff must present facts indicating the defendant's interference is somehow wrongful—i.e., based on facts that take the defendant's actions out of the realm of legitimate business transactions." "[T]he competition privilege is defeated only where the defendant engages in unlawful or illegitimate means." "Wrongful" in this context means "independently wrongful"—that is, "blameworthy" or "independently wrongful apart from the interference itself". This may be termed use of improper means. "Commonly included among improper means are actions which are independently actionable, violations of federal or state law or unethical business practices, e.g., violence, misrepresentation, unfounded litigation, defamation, trade libel or trade mark infringement." Other examples of wrongful conduct are "fraud, misrepresentation, intimidation, coercion, obstruction or molestation of the rival or his servants or workmen".

Damages

Typical legal damages for tortious interference include economic losses, if they can be proven with certainty, and mental distress. Additionally punitive damages may be awarded if malice on the part of the wrongdoer can be established.

Equitable remedies may include injunctive relief in the form of a negative injunction that would be used to prevent the wrongdoer from benefiting from any contractual relationship that may arise out of the interference, i.e., the performance of a singer who was originally contracted with the plaintiff to perform at the same time.