Introduction

In the landmark case Secretary of State for Health & Anor v Servier Laboratories Ltd & Ors ([2021] UKSC 24), the United Kingdom Supreme Court addressed a pivotal issue in the realm of economic torts, specifically the tort of causing loss by unlawful means. The appellants, representing the interests of the National Health Service (NHS) in England, brought forth a claim against Servier Laboratories, alleging that the defendants engaged in deceitful practices that interfered with third-party actions, thereby causing economic loss to the NHS. Central to the dispute was whether the "dealing requirement"—the necessity that unlawful means must affect a third party’s freedom to deal with the claimant—remained an essential element of the tort.

Summary of the Judgment

The Supreme Court upheld the lower courts' decisions, affirming that the dealing requirement is indeed a fundamental component of the unlawful means tort as established in OBG Ltd v Allan [2007] UKHL 21. The Court concluded that without the dealing requirement, the tort would risk becoming overly broad, potentially leading to indeterminate liability and undermining the legislative balance governing economic torts. Consequently, the appellants' claim was dismissed, reinforcing the necessity of the dealing requirement in such tortious claims.

Analysis

Precedents Cited

The judgment extensively referenced pivotal cases that have shaped the understanding of the unlawful means tort:

• OBG Ltd v Allan [2007] UKHL 21: This case clarified the elements of the unlawful means tort, emphasizing the intent to cause loss through interference with a third party’s freedom to deal with the claimant.
• RCA Corpn v Pollard [1983] Ch 135: Demonstrated that merely causing economic loss without interfering directly with a third party’s dealings does not establish liability.
• Isaac Oren v Red Box Toy Factory Ltd [1999] FSR 785: Reinforced the necessity of interference with a third party’s contractual relationships for a valid claim.
• Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173: Highlighted that indirect actions affecting a third party without direct interference do not suffice for liability.

These precedents collectively underscore the Court’s consistent stance that the unlawful means tort necessitates a tangible interruption of the claimant's economic relations with a third party.

Legal Reasoning

The Court's reasoning centered on maintaining the tort's boundaries to prevent its misuse and overextension. By affirming the dealing requirement, the Court ensured that only deliberate and direct interferences affecting the claimant’s economic interactions are actionable. This approach aligns with the legislative intent to regulate economic competition fairly without entrusting the courts with crafting intricate rules better suited for parliamentary oversight.

Lord Hoffmann, delivering the leading judgment, articulated that the dealing requirement serves as a crucial control mechanism, delineating the tort's scope and safeguarding against indeterminate liability. The majority opinion stressed that without such a requirement, the tort could encompass a vast array of actions, leading to legal uncertainty and inadvertently penalizing lawful economic activities.

Impact

This judgment has significant implications for future cases involving economic torts. By reinforcing the dealing requirement, the Supreme Court:

• Limits claims to scenarios where the defendant's unlawful actions directly impede the claimant’s relationships with third parties.
• Prevents the tort from being a catch-all for any unlawful or deceitful conduct that results in economic loss, thereby enhancing legal certainty.
• Maintains a clear demarcation between common law remedies and statutory frameworks governing economic competition, ensuring that complex regulatory issues remain within legislative purview.

Consequently, litigants must now ensure that their claims under the unlawful means tort satisfy the dealing requirement, narrowing the scope of actionable tortious interference.

Complex Concepts Simplified

Conclusion

The Supreme Court’s decision in Secretary of State for Health & Anor v Servier Laboratories Ltd & Ors serves as a definitive affirmation of the dealing requirement within the unlawful means tort. By upholding this requirement, the Court has reinforced the necessity for clear and direct interference with a claimant’s economic relations to establish liability. This not only preserves the integrity and manageability of economic tort claims but also ensures that such legal remedies remain within a well-defined scope, preventing potential abuses and maintaining the balance between fair competition and legal recourse. This judgment thereby solidifies the existing legal framework, providing clarity and certainty for future litigants and legal practitioners navigating the complexities of economic torts.