Economic torts are torts that provide the common law rules on liability for the infliction of pure economic loss, such as interference with economic or business relationships.
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[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.
In English labour law the most notable case is Taff Vale Railway v. Amalgamated Society of Railway Servants[4]. The House of Lords thought that unions should be liable in tort for helping workers to go on strike for better pay and conditions. But it riled workers so much that it led to the creation of the British Labour Party and the Trade Disputes Act 1906 Further torts used against unions include conspiracy[5], interference with a commercial contract[6] or intimidation[7].
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 Ltd v Allan.[8]