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Employment Law

Legal guidance - compliance - software

06 MAR 2012

One man conspiracies in employee disloyality cases?

By Simon Devonshire QC

There are potential tactical advantages to framing claims for tortious conspiracy against disloyal, departing employees.   In tort claims, damages are said to be ‘at large'; exemplary and punitive damages are available; the conspirators are jointly and severally liable for their wrongdoing.   But what is the position of a sole employee defendant, who leaves and diverts business to his own one-man company or corporate alter ego?   Can he be said to conspire with himself in such circumstances?    In Barclays Pharmaceuticals & Ors -v- Wayfarm LP & Ors [2012] EWHC 306 (Comm), Gloster J answered this question in the affirmative.   Her reasoning was as follows.  

Inducing breach of contract or causing loss by unlawful means required positive action by the defendant in relation to the claimant.   This was not the case in conspiracy, where liability might be grounded by the agreement between two persons, aimed at another, to use unlawful means, pursuant to which action was taken, resulting in damage to the victim.   There was no requirement that the defendant had to be the one taking the action, providing that he is party to the agreement (para 222).   It was a persuasive proposition that "agreement to cause injury by unlawful means is an actionable conspiracy notwithstanding that the parties to the agreement might be the natural person and a limited  company under his control, or two or more persons under the control of a single person" (para 227).   On this basis, the principal wrongdoer and the companies of which he was the controlling mind were jointly and severally liable in conspiracy (para 229).

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