Against Lumley v Gye
| Published date | 01 March 2005 |
| Date | 01 March 2005 |
| DOI | http://doi.org/10.1111/j.1468-2230.2005.00535.x |
Agai nst Lumley vGye
David Howarth
n
The LumleyvGy e tortof i nducing a breach of contract is the foundation of strike law,although it
also has a wider commercial role.We should reject the view that Lumley liability follows automa-
tically from general contractual liability. Contract law is optional. Imposing its obligations on
unwillingparties requires special justi¢cation.We should also be sceptical about the claim that
Lumley liability increases con¢dence that contracts will be enforced. Such scepticism should be
enhanced by parallels between Lumleyl iability and restitutionary damages for breach of contract.
Some Lumleycases illustrate the point that‘e⁄cient breachof contract’ has a moralcore, not just an
economic core.For example, it can sometimes be unreasonable and unjust for parties to insist on
precise contractual performance when they know that circumstances have changed in ways that
the contract did not anticipate. For all these reasons the justi¢cation defence to Lumleyshould be
widened.
Lumley vGye
1
decided that it is a tort intentionally to induce a breach a contract.
Apart from the requirement to show intention, the obligation under the tort is
close to absolute. Defendants may not argue that the inducement was reasonable
in all the circumstances, or that the obligation not to induce should apply only to
certain types ofcase. It is possible to ‘justify’ an inducement,
2
but the scope of the
justi¢cation defence is narrow. Justi¢cation must consist of carrying out a legal,
moralorsocialduty.
3
Even that is not enough if bri nging a legal action could have
su⁄ced to carry out the duty.
4
The fact that the breach is pro¢table for the defen-
dant and for the contract breaker is obviously not a justi¢cation,
5
but good faith
and absence of malice are also no justi¢cation.
6
Even acting altruistically for the
n
Fellow, Clare College, Cambridge; Lecturer in Law, Department of Land Economy, University of
Cambridge.The author would li ke to thank al l those who commented on previous drafts of this arti-
cle, especially RoderickBagshaw,Andrew Simester and DavidIbbetson. They mademany useful sug-
gestions and prevented manyerrors. For the remaining errors, and for the new errors introduced by
attempting to correctthe previous errors, the author remains entirely responsible.
1 (1853) 2 E & B 216.The plainti¡, an opera impresario,e ngageda famous singer to perform exclu-
sivelyfor him at his theatre.The plainti¡ alleged that the defendant, a rival promoter, knowingof
the singer’s contract with the plainti¡, persuaded her to sing athi s theatre.The Court of Queen’s
Bench decided that the alleged facts would constitute a tort. In the event, the plainti¡ failed to
establish the facts at trial. See S.Waddams,‘Johanna Wagner and the Rival Opera Houses’ (2001)
117 LQR 431.
2 See eg K. Oliphant,‘The EconomicTorts’ in A. Grubb et al,The Law ofTor t (London: Butter-
worths,20 02) 1237.
3Stott vGamble[1916] 2 KB 504 (lice nsing authorities); Brimelow vCasson [1924] 1 Ch 302 (chorus
girls paid wages so low that inducing them to breach their contracts amounted to saving them
from prostitution).
4 This is so even if legal action was not an attractive option because of the inequality in wealth
between the parties. See Camden Nominees Ltd vForcey [1940 ] Ch 352.
5Glamorgan Coal Co vSouthWalesMi ners’Federation [1903] 2 KB 545.
6Read vFriendlySocietyof Operative StonemasonsofEngland,IrelandandWales[190 2] 2 KB 88; Glamorgan
Coal Co vSouthWales Miners’Federation [1903]2 KB 545; GreigvInsole [1978]1 WLR 302;Edwin Hill
& Partners vFirstNationalFinance Corp plc[1988]3 All ER801, [1989] 1WLR 225.
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(2005) 68(2)MLR 195^232
interests of others is not enough.
7
Similarly, acti ng in defence of one’s own i ndivi-
dual or collective interests is insu⁄cient, even though it doessu⁄ce in other torts
such as conspiracy to injure.
8
Thesameruleappliesevenwheretheinducementis
in retaliation against the claimant’s breach of contract.
9
The Lumley tort has long been controversial.
10
Some scholars have suggested
that the case should be treated as wrong. Admittedly, the mai n promoter of that
view in modern times added,‘it is now too late tocorrect that mistake’
11
and sought
to raise doubts about its sound ness only to discourage the creation of new forms
of liability that used Lumley as a starting point, but the mere suggestion has set
o¡ a growing collection of justi¢catory comment.
12
The existence of this body of
comment raises the question why there is so much sensitivity about the rule in
Lumley, along with the substantive question of whether the new-found justi¢cations
for it really are convincing.The purpose of this article is twofold: ¢rst, to point out
anobviousreasonwhytheruleinLumley touches nerves, its connection with indus-
trial relations law, along with perhaps a less obvious reason, its connection with
the recent idea that the account of pro¢ts remedy should be available for breach of
contract; and secondly, to argue that despite the strenuous and subtle e¡orts of
respected scholars to justify it, there is something fundamentally questionable about
the rule in Lumley, and that the courts should allow a much broader justi¢cation
defence to it, a broader justi¢cation defence whose outline can already be discerned
in the case law.
WHY LUMLEY TOUCHES A NERVE
The obvious reasonwhy Lumleycauses anxiety is that it forms the basis of thelaw
on strikes. Although one cannot read the legal or social importance of a type of
dispute directly from the frequency with which it generates reported cases, it is
7Read vFriendlySociety of OperativeStonemasons of England, Irelandand Wales,ibid.
8Read vFriendlySocietyof OperativeStonemasonsof England, IrelandandWales,ibid;PrattvBritish Medical
Association[1919] 1 KB 24 4; De Jetley, Marks vGreenwood [1936] 1 All ER 863.
9SmithiesvNationalAssociation of Operative Plasterers[190 9] 1 K B 310.
10 See eg F.Sayre,‘Inducing Breach of Contract’ (1923) 36 HarvLR 663.
11 D. Howarth,Textbook onTort (London: Butterworths, 1995) 475^76 and 484.Se e also D. Howarth
and J. O’Sul livan, Hepple,Howarth and Matthews’Tort: Casesand Materials (London: Butterworths,
5
th
ed, 2000) 872. The rule in Lumley,and its progeny, has also encountered severe criticism i n the
USA. See eg D. Dobbs,‘Tortious Interferencewith ContractualRelationships’ (1980) 34 Ark ansas
Law Review 335; S. Perlman,‘Interference with Contract and Other Economic Expectancies: A
Clash of Torta ndContract Doctrine’ (1982) 49 Universityof Chicago Law Review61 and G.Wexler,
‘Intentional Interference with Contract: Market E⁄ciency and Individual Liberty Considera-
tions’ (1994) 27 ConnecticutLaw Review 279.Se e also C.Remington,‘Intentional Interference with
Contract and the Doctrine of E⁄cient Breach: FineTuning the Notion of the ContractBreacher
asWrongdoer’(1999) 47Bu¡alo Law Review64 6. For a more positive American view of Lumley,see
egW.Woodward,‘Contractarians,Community, and theTortof Interference with Contract’(1996)
80 Minnesota Law Review 1103.
12 Especially T.Weir, EconomicTorts (Oxford: Clarendon, 1997); R. Bagshaw,‘Inducing Breach of
Contract’in J. Horder (ed), OxfordEssays inJurisprudence (FourthSeries) (Oxford:OUP, 2000) and ,
‘Canthe Economic Torts Be Uni¢ed’(1998)18 OJLS 729, and A. Simester andW. Chan,‘Inducing
Breach of Contract: OneTortor Two’ [2004] CLJ 132.
Against LumleyvGy e
196 rThe Modern Law Review Limited 2005
nevertheless impressive that strikes feature in about 40 per centof all the reported
cases in which Lumleyhas provided the basisof a cause of action.
13
Another 20 per
cent of the reported cases concern other issues arising out of employment or per-
sonal services contracts.Typically they concernemployerswho lure awayemploy-
ees who have special skills or con¢dential information.
14
The remaining 40 per
cent cover a variety of commercial contexts, including trade boycotts and rent
strikes (which, of course, share many characteristics with industrial strikes),
15
attempts to enforce against third parties contracts that limit competition (for
example, the nowillegal practice of retail price maintenance),
16
attempts to widen
the scope of the enforceability ofcon¢dentiality agreements to cover third parties
(whichwould now be within the province of breachof con¢dence),
17
attempts to
make restrictivecovenants runwith the land when the bene¢ciary no longerhas a
su⁄cient interest in the dominant land,
18
complaints about unwelcome changes
of policy by private or publicregulators,
19
accusations of collusion between archi-
tects and developers in constructioncontract disputes,
20
and attempts to evade the
consequences of the corporate veil or similar attempts to widen responsibility for
collective acts to encompass the individuals who took part in the process of deci-
sion-making.
21
Noneof these other categories of case canclaim the political,social
or economic signi¢cance of the law on strikes, especially when more direct legal
methods, for example the law of con¢dentiality, have evolved to deal with the
same issues.
13 Eg,i n the past coupleof decades alone, when unions and employerswould presume that strikes
were unlawful unless proven otherwise: Patrick StevedoresOperation Pty LtdvInternationalTransport
Workers’Federation[1998]2 Lloyd’s Rep 523; Middlebrook Mushrooms Ltd vTransport and GeneralWork-
ers’Union [1993] ICR 612, [1993] IRLR 2 32; UnionTra⁄c Ltd vTransport & General Workers Union
[1989] IRLR127, [1989] ICR 98; Barretts& Baird (wholesale) Ltd vInstitutionof Professional CivilSer-
vants [1987] IRLR 3, [1987] FTLR 121; News GroupNewspapersLtd vSOGAT ’82 [1987] ICR 181,
[1986] IRLR 337; MerkurIsland Shipping CorporationvLaughton [1983] 2 AC 570.
14 Eg Millar vBassey [1994] EMLR 44; JonesBrothers(Hunstanton)LtdvStevens[1955] 1 QB 275,[1954]
3AllER677;BritishIndustrialPlastics Ltd vFerguson [1938] 4 All ER 5 04; Rely-A-Bell Burglar and Fire
AlarmCompany LimitedvEisler [1926]C h 609; FredWilkinsand Brothers LimitedvWe a v e r [1915] 2 Ch
322; BowenvHall (1881) 6QBD 333.
15 Eg DailyMirrorNewspapersLtdvGardner [1968] 2 QB 762, [1968] 2 All ER 163; Camden Nominees
LimitedvForc ey n4above,[1940]2AllER1;Pratt vBritishMedical Association [1919] 1 K B 24 4.
16 UniquePub PropertiesLimited vBeerBarrels& Minerals(Wales)Ltd [2004] EWCACiv 586; Oren vRed
BoxToy FactoryLtd [1999]FSR 785, (1999) IP & T Digest 11;British MotorTradeAssociationvSalvadori
[1949]Ch 556, [1949]1 All ER 208, 65TLR 44, [1949] WN 24;Ja spers on vDominionTobaccoCompany
[1923] AC 70 9; Goldsoll vGoldman [1914] 2 Ch 603; National Phonograph Company LimitedvEdison-
BellConsolidatedPhonographCompany, Limited [1908 ] 1 Ch 335.
17 Schering ChemicalsLtd vFalkman Ltd [1982] QB 1; British Industrial Pl astics Ltd vFerguso n,n14above;
ExchangeTelegraphCompany LimitedvGregory & Co [189 6] 1 Q B 147.
18 Eg Sefton vTophams Ltd [1965] Ch 1140.
19 Eg Greig vInsole [1978] 3 Al l ER 449, [1978] 1 W LR 30 2; G. Scammelland Nephew LimitedvHurley
[1929] 1 KB 419, Stott vGamble [1916] 2 KB 504.
20 Eg John Mo wlem & Co Plc vEagle Star InsuranceCo Ltd (1992) 62Bui ld LR126, (1993) 33 Con LR
131; LubenhamvSouth Pembrokeshire District Council(1986 ) 33 BLR 39.
21 EgThe ‘Kaliningrad’ and‘NadezhdaKrupskaya’ [1997]2 Lloyd’s Rep 35; LawDebentureTrust Corporation
vUral CaspianOil Corporation Ltd [1995] Ch 152; Meta ll Und Roh sto¡ AG vDonaldson Lufkin& Jenrette
Inc [1990] 1 Q B 391; TransatlanticRecords Ltd vBulltown Ltd 1980 T 118; Kans sen vRialto(WestEnd)
Limited[194 4] Ch 15 4; Mcmanus vBowes[1938]1 KB 98 [1937] 3 All ER 227; DeJetleyMarksvGreen-
wood (L ord) [1936] 1 Al l ER 863; Said vButt [1920]3 KB 497.
David Howarth
197rThe Modern LawReview Limited 2005
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