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‘Error of Judgment’
or Unlawful means Conspiracy
by Nicola Sharp
From a claimant’s perspective a claim in conspiracy can be a useful way of proceeding against
multiple defendants.
There is no requirement that all of the defendants to
an unlawful means conspiracy claim have to use unlawful means, and there is no requirement that the
conspirators know of the unlawfulness of the means.
4. Which actually injures the claimant.
To be liable in unlawful means conspiracy, a defendant
must intend to cause harm to the claimant, but that
need not be the predominant purpose.
In a recent case, the defendants admitted ‘errors in
judgment’, but did not necessarily realise that they
may be liable for unlawful means conspiracy. Etta
Healthcare v Steven Aimson & Ors [2024] EWHC 1209
(Ch) shows that an action in unlawful means conspiracy can cast a wide net, and catch defendants
unawares.
Damages
Interestingly, in a claim for unlawful means conspiracy, the claimant does not have to prove every element
of its pecuniary loss.
Etta Healthcare relied on Lonrho plc v Fayed (No.5)
(supra) as authority for the proposition that once some
pecuniary loss is established, damages in conspiracy
are at large. The damages are not limited to the
particular loss actually proved.
Brief facts
Etta Healthcare alleged that four defendants
conspired together to steal its business. They say that
the defendants planned to use their business for a new
venture, Hive Resourcing Group Limited (now dissolved), a company of which one of the defendants
(Mrs Aimson) was the sole trader and director.
The starting point is that damages for conspiracy, as
with any other tortious claim, fall to be assessed so as
to put the injured party in the position that they would
have been in had the tort, here the conspiracy, not
occurred.
Etta Healthcare was a joint venture between Mr
Torkington and Mr Goluguri on the one hand, and
Mr Aimson on the other hand. The evidence suggested that Mr Aimson became dissatisfied with the
way that things were going at Etta, and his relationship with Mr Torkington and Mr Goluguri.
Mr Aimson, Mrs Aimson and Mrs Higgins were found
to be liable jointly and severally in the same amount
for the loss occasioned by the conspiracy.
To determine loss, the court took the approach of
placing a value on the lost business (as suggested by
the expert witness). The court awarded damages
against each of Mr Aimson, Mrs Aimson and Mrs Higgins for £275,000.
Hive was set up under Mrs Aimson’s ownership and
control. Mr Aimson downloaded the information in
Etta Healthcare’s database (which contained confidential, and crucial information about recruitment
candidates) and transferred it to Hive.
Analysis
This case highlights the serious consequences of
unlawful means conspiracy and the high price to pay
for being found liable.
Mrs Higgins and Ms Gannon were persuaded to
move from Etta Healthcare, to join the new venture,
Hive.
Given that it is not necessary that all the defendants
have to use unlawful means, and there is no requirement that they know of the unlawfulness of the means,
the tort can catch some defendants who simply
thought they had exercised an ‘error of judgment’.
The unlawful acts carried out by Mr Aimson deprived
Etta Healthcare of its business and caused it to cease to
carry on business. Etta Healthcare had essentially
been stripped of its business through the use made by
Hive of the misapplied data from the database, and
because it had lost its key employees to Hive.
Author
Nicola Sharp - Partner
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of
leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations
for corporates.
Essential ingredients of unlawful means conspiracy
The essential ingredients of the tort of unlawful means
conspiracy are set out in Cuadrilla Bowland Ltd v Persons
Unknown [2020] 4 WLR 29. There must be:
1. An unlawful act by a defendant;
2. Which was done with the intention of injuring the
claimant;
3. Pursuant to an agreement or combination (whether
express or tacit) with one or more other persons; and
EXPERT WITNESS JOURNAL
nicola.sharp@rahmanravelli.co.uk
www.rahmanravelli.co.uk
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