Dear Colleagues:

 

I found the reasoning in JSC BTA Bank v Khrapunov [2018] UKSC 19 to be very difficult to understand in key places. For example, what is the court trying to say in [10]?

 

10.             What is it that makes the conspiracy actionable as such? … . A more useful concept is the absence of just cause or excuse, … . A person has a right to advance his own interests by lawful means even if the foreseeable consequence is to damage the interests of others. The existence of that right affords a just cause or excuse. Where, on the other hand, he seeks to advance his interests by unlawful means he has no such right. The position is the same where the means used are lawful but the predominant intention of the defendant was to injure the claimant rather than to further some legitimate interest of his own. This is because in that case it cannot be an answer to say that he was simply exercising a legal right. He had no interest recognised by the law in exercising his legal right for the predominant purpose not of advancing his own interests but of injuring the claimant. In either case, there is no just cause or excuse for the combination.

 

They seem to be relying on the right to trade fallacy, from Quinn v Leathem, that Hohfeld demolished.  If the court is correct that the right exists, then why am I liable if I negligently walk into my neighbour—I have a right to advance my own interests, and walking is lawful and not in contravention of the criminal law. The court just seems to be describing the holdings of the cases in conspiracy without explaining them.

 

I also found it interesting that the court concluded at [9], disagreeing with Lonrho Ltd v Shell Petroleum Co Ltd [1982] AC 173, that proof of overt acts taken in furtherance of the conspiracy is not an element of the tort. Instead, like the crime, the tort is comprised of the “the agreement or understanding that the parties will act unlawfully, whether or not it is implemented”.  Damage and the overt acts which cause that damage, are merely an ad hoc actionability requirement:

 

This is true in the obvious sense that a tortious conspiracy, like most other tortious acts, must have caused loss to the claimant, or the cause of action will be incomplete. It follows that a conspiracy must necessarily have been acted on. But there is no more to it than that. The critical point is that the tort of conspiracy is not simply a particular form of joint tortfeasance.

 

It appears that once the UKSC decided Total Network as it did, everything after it will be GIGO: garbage in, garbage out.

 

Sincerely, 

 

 

 

Dear Colleagues,

 

The UK Supreme Court has handed down judgment in two tort cases today: one on actionable damage and the other on unlawful means conspiracy.

 

A. The first is Dryden v Johnson Matthey [2018] UKSC 18 (it was known as Greenway at the Court of Appeal stage). The claims were in respect of exposure to platinum salts, which had led to the claimants developing platinum sensitisation, and the question was whether that amounted to actionable personal injury. It was accepted that if any claimant had developed an allergy (as opposed to sensitisation) that would be actionable injury.  The Supreme Court allows the appeal and the claimants succeed. Lady Black distinguishes Rothwell, and takes the following from her survey of the law:

 

27. “It can be seen from the passages referred to above that, as well as the usual reference to “pain, suffering and loss of amenity”, personal injury has been seen as a physical change which makes the claimant appreciably worse off in respect of his “health or capability” (Lord Hoffmann at para 7 of Rothwell) and as including an injury sustained to a person’s “physical capacity of enjoying life” (Fair v London & North-Western Railway Co (1869) 21 LT 326, 327, quoted by Lord Pearce in Cartledge, at p 778), and also an “impairment”. Furthermore, it has been established that it can be hidden and symptomless (Cartledge).”

 

Her Ladyship criticises the approach of the Court of Appeal (and the company’s defence of it), concluding:

 

“40. The physiological changes to the claimants’ bodies may not be as obviously harmful as, say, the loss of a limb, or asthma or dermatitis, but harmful they undoubtedly are. Cartledge establishes that the absence of symptoms does not prevent a condition amounting to actionable personal injury, and an acceptance of that is also implicit in the sun sensitivity example, in which the symptoms would only be felt upon exposure to sunshine, just as the symptoms here would only be felt upon exposure to platinum salts. What has happened to the claimants is that their bodily capacity for work has been impaired and they are therefore significantly worse off. They have, in my view, suffered actionable bodily damage, or personal injury, which, given its impact on their lives, is certainly more than negligible.”

 

47. “I would distinguish this case from Rothwell. I set out earlier how the doctors saw the distinction between pleural plaques and sensitisation to platinum salts but it is, of course, ultimately a lawyer’s question whether the two conditions are distinguishable. As I see it, it is material that the pleural plaques were nothing more than a marker of exposure to asbestos dust, being symptomless in themselves and not leading to or contributing to any condition which would produce symptoms, even if the sufferer were to be exposed to further asbestos dust. Similarly, the sensitisation of the claimants in this case marks that they have already been exposed to platinum salts, but unlike the plaques, it constitutes a change to their physiological make-up which means that further exposure now carries with it the risk of an allergic reaction, and for that reason they must change their everyday lives so as to avoid such exposure. Putting it another way, they have lost part of their capacity to work or, as the claimants put it in argument, they have suffered a loss of bodily function by virtue of the physiological change caused by the company’s negligence.”

 

And

 

48. “As Lord Pearce said in Cartledge (supra para 15), it is a question of fact in each case whether a man has suffered material damage by any physical changes in his body. It is a question of fact that must be determined in the light of the legal principles applicable to personal injury actions, and this case has provided a useful opportunity to clarify some of those principles. The process has led me, for all the reasons I have set out, to differ from Jay J and the Court of Appeal and to conclude that the concept of actionable personal injury is sufficiently broad to include the damage suffered by these claimants, which is far from negligible.”

 

Rothwell therefore remains the law, but Lady Black’s approach would seem to leave scope for more conditions to be recognised as actionable damage than previously.

 

B. JSC BTA Bank v Khrapunov [2018] UKSC 19 is part of a long running saga of litigation concerning many claims brought by a bank incorporated in Kazakhstan. This claim was a claim in unlawful means conspiracy, with the “unlawful means” said to be contempts of court by breaching various court orders. The Supreme Court thus got to consider the economic torts principles previously seen in casces like OBG and Total Network in the judgment given by Lord Sumption and Lord Lloyd Jones. I shall not provide many excerpts, but the Justices conclude that the claim is in principle maintainable:

 

16. “The unlawful means relied upon in this case are criminal contempt of court albeit that the offence is punishable in civil proceedings. The Bank does not of course contend that the defendants’ predominant purpose in hiding Mr Ablyazov’s assets was to injure it. Their predominant purpose was clearly to further Mr Ablyazov’s financial interests as they conceived them to be. At the same time, damage to the Bank was not just incidental to what they conspired to do. It was necessarily intended. The freezing order and the receivership order had been made on the application of the Bank for the purpose of protecting its right of recovery in the event of the claims succeeding. The object of the conspiracy and the overt acts done pursuant to it was to prevent the Bank from enforcing its judgments against Mr Ablyazov, and the benefit to him was exactly concomitant with the detriment to the Bank as both defendants must have appreciated. In principle, therefore, we conclude the cause of action in conspiracy to injure the Bank by unlawful means is made out.”

 

Nor, in their Lordships’ view, was it inconsistent with public policy for such a claim to be recognised. There is also some brief interesting discussion on whether civil damages can be recovered for contempt to court as a direct claim.

 

Best wishes,

James

 

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James Lee

Reader in English Law and PC Woo Research Fellow 2016-17

The Dickson Poon School of Law

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Recently Published: James Lee, ‘Tax, Equity and Artificiality’ (2018) 31 Trust Law International 219 (via westlaw) http://login.westlaw.co.uk/maf/wluk/ext/app/document?crumb-action=reset&docguid=I702FCE20183311E8A2BDF3E0C57C8207

 

Man Yip and James Lee, ‘The Commercialisation of Equity’ (2017) 37(4) Legal Studies 637 http://onlinelibrary.wiley.com/doi/10.1111/lest.12167/full

 

James Lee, ‘The Judicial Individuality of Lord Sumption’ (2017) 40(2) University of New South Wales Law Journal 862 http://www.unswlawjournal.unsw.edu.au/sites/default/files/402_15.pdf