Date: Wed, 6 Jun 2007 06:00

From: John Murphy

Subject: OBG v Allen, Stratford v. Lindley and Lumley

This is an interesting question that I wondered about when reading OBG.

There seem to be two key passages in Hoffmann's speech.

The first comes from para 34.

Lord Denning said that it did not matter whether one procured a breach of contract "by direct approach to the one who breaks his contract or by indirect influence through others". There seems to me much sense in this observation, although whether it leads to the conclusion that the defendant should be liable in both cases or neither is another matter.

And here we are left dangling.

Then in para 36 he says:

the real question which has to be asked in relation to Lumley v Gye [is] did the defendant's acts of encouragement, threat, persuasion and so forth have a sufficient causal connection with the breach by the contracting party to attract accessory liability? The court in Lumley v Gye made it clear that the principle upon which a person is liable for the act of another in breaking his contract is the same as that on which he is liable for the act of another in committing a tort. It follows, as I have said, that the relevant principles are to be found in cases such as CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013 and Unilever v Chefaro [1994] FSR 135. By the test laid down in these cases, the Federation could not have incurred any liability. They were not encouraging or assisting the wholesalers in breaking their contracts. They were simply advising their members to exercise their own freedom to buy whatever newspapers they liked. The wholesalers had no right to the co-operation of the retailers in enabling them to perform their contracts. Liability could not depend upon the accident of whether the Federation had communicated (directly or through an intermediary) with the wholesalers. The distinction between direct and indirect interference was therefore irrelevant and misleading.

For what it is worth, I think that taken together the excerpts suggest (a) that indirect persuasion may suffice, but (b) that persuasion/procurement/inducement are very different creatures from merely advising X who later acts of his own volition in a way that causes a breach of contract. In short, where the intermediary is advised but not induced, his critical act becomes a novus actus in the chain of causation and thus the original advisor cannot be held liable for indirectly procuring breach of contract.

Like Jason, I'd be interested to know what others think.

John Murphy

From: Jason Neyers
Subject: ODG: OBG v Allen, Stratford v. Lindley and Lumley
Date: Tue, 05 Jun 2007 15:25:32 -0400

Dear Colleagues:

Do you think that the reasoning of the majority in OBG v Allen overrules part of the reasoning in Stratford v. Lindley?

As I understand the Stratford case, their Lordships held that the Union who “blacked” the plaintiff Shipyard’s barges committed the Lumley tort in two ways.

The first way was that the Union induced its members to breach their contracts with the individual employers who were leasing out the barges (from the plaintiff-Shipyard). The breach induced was that the employees refused orders from the employees to pilot the barges back to the plaintiff’s Shipyard. That seems correct to me and would make the Union liable to the renting-employers.

The second way that the Union was said to have committed the tort was as follows. The union was said to have induced a breach of contract between the renters of the barges (the employers) and the Shipyard since the renters were required to return the barges and did not. The reason they failed to do so was that their employees would not take orders from the employers. Hence the Union was also liable to the Shipyard.

The trouble I have is that it does not seem that the Union assisted or procured the breach of the barge renters (as required by Lord Hoffmann in OBG).

Any thoughts? Is the Union liable to Shipyard using the analysis of Lumley in OBG.

I realize that one might be able to dress up liability in the second example by using the breach by the employees in first example as unlawful means used by the Union against the Shipyard but I want to ignore that possibility for now (for my own sanity).

<<<< Previous Message  ~  Index  ~  Next Message >>>>>