Unlawful Means and the Pizza Example

Origins: OBG Ltd and others v Allan and others [2007]

The story seems to start with the House of Lords’ decision in OBG Ltd and others v Allan and others [2007] UKHL 21, [2008] 1 AC 1. Their Lordships were considering what type of unlawful conduct qualified as unlawful means, for the tort of interference in a business by unlawful means. Was it anything at all that could be said to be unlawful, or did a line need to be drawn somewhere? At para 266, Lord Walker of Gestingthorpe said this:

“266. On the economic torts, the most important difference is in the identification of the control mechanism needed in order to stop the notion of unlawful means getting out of hand — for example, a pizza delivery business which obtains more business, to the detriment of its competitors, because its drivers regularly exceed the speed limit and jump red lights.”

This idea did not emerge out of nowhere. Lord Nicholls of Birkenhead had, at paragraph 160 in the same judgment, invoked not a pizza business but a courier service, an illustration he described (without citation) as “oft quoted”. So it seems the courier example had been discussed in previous cases, or in academic commentary. Its ultimate origins may be lost to time.

Lord Nicholls was considering the perceived difficulties of allowing any type of unlawful conduct to suffice as unlawful means – even unlawfulness which in itself would not give the claimant a right of action, such as when a defendant (C) infringes the patent of a third party (B) to gain an illegitimate competitive advantage over a trade competitor (A). He said A had to be “harmed through the instrumentality” of B: there had to be some connection between the unlawful act committed by C against B, and the harm caused to A.

“159. The difficulties here are more apparent than real. The answer lies in keeping firmly in mind that, in these three-party situations, the function of the tort is to provide a remedy where the claimant is harmed through the instrumentality of a third party. That would not be so in the patent example.

160. Similarly with the oft quoted instance of a courier service gaining an unfair and illicit advantage over its rival by offering a speedier service because its motorcyclists frequently exceed speed limits and ignore traffic lights. The unlawful interference tort would not apply in such a case. The couriers’ criminal conduct is not an offence committed against the rival company in any realistic sense of that expression [emphasis added].

[…]

162. For these reasons I accept the approach of Lord Reid and Lord Devlin and prefer the wider interpretation of ‘unlawful means’. In this context the expression ‘unlawful means’ embraces all acts a defendant is not permitted to do, whether by the civil law or the criminal law.” 

It appears, then, that previous consideration of the speeding drivers concerned couriers. It may be that Lord Walker chose to spice it up by introducing the pizzas. From then on, it was pizzas pretty much all the way.

Their Lordships were not all of the same mind in OBG. As noted above Lord Nicholls favoured a wide definition under which any unlawful conduct would suffice as unlawful means so long as the unlawful conduct was “instrumental” in the harm caused. “Instrumental” meant connected to the harm, in a more direct way than the speediness of the lawbreaking pizza deliverers. Lord Hoffmann, by contrast, proposed at para 51 a narrower scope, limited to interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant.

In both scenarios the courier/pizza businesses would not be liable to their rivals because the crimes of their delivery drivers, though unlawful and intended ultimately to damage the claimant’s business, were not “committed against” the claimant (per Lord Nicholls) and did not interfere with a third party’s freedom to deal with the claimant (per Lord Hoffmann).

Reheating the Pizza: Revenue and Customs Commissioners v Total Network SL [2008]

In Revenue and Customs Commissioners v Total Network SL [2008] UKHL 19, [2008] 1 AC 1174, a House of Lords judgment handed down months after OBG, one question was what constituted unlawful means for the tort of conspiracy. The analysis was slightly different from that in OBG, since in conspiracy there is no requirement of interference via a third party in another’s business: the unlawful means simply have to have intentionally caused harm to the claimant. It might therefore be thought that Lord Nicholls’s “instrumentality” formulation was less obviously helpful in conspiracy cases, since there was no need for the unlawfulness to involve a third party. However, both instrumentality and pizzas turned up again.

The issue was whether a criminal breach of a tax statute (in a VAT fraud scheme) could be unlawful means for the tort of conspiracy, despite not being civilly actionable by the claimant. As the fraud was plainly intended to harm the public revenue, their Lordships had little difficulty finding that it was. Lord Walker concluded as follows, without touching on pizzas or couriers at all:

“93. […] all the statements of general principle in the classic cases seem to me to be consistent with the proposition that unlawful means, both in the intentional harm tort and in the tort of conspiracy, include both crimes and torts (whether or not they include conduct lower on the scale of blameworthiness) provided that they are indeed the means by which harm is intentionally inflicted on the claimant (rather than being merely incidental to it). […]

94. From these and other authorities I derive a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort. […]

95. In my opinion your Lordships should clarify the law by holding that criminal conduct (at common law or by statute) can constitute unlawful means, provided that it is indeed the means (what Lord Nicholls of Birkenhead in OBG at para 159 called “instrumentality”) of intentionally inflicting harm.[…]

96. […] the range of possible breaches of statutory duty, and the range of possible conspiracies, are both so wide and varied that it would be unwise to attempt to lay down any general rule. What is important, to my mind, is that in the phrase “unlawful means” each word has an important part to play. It is not enough that there is an element of unlawfulness somewhere in the story.”

Thus in conspiracy cases it was not necessary that the unlawful act be actionable by the claimant, as long as it was the means of intentionally inflicting harm.

At para 119 of Total Network Lord Mance reheated the pizza example, thereby extending its application to the context of conspiracy:

“119. Caution is nonetheless necessary about the scope of the tort of conspiracy by unlawful means. Not every criminal act committed in order to injure can or should give rise to tortious liability to the person injured, even where the element of conspiracy is present. The pizza delivery business which obtains more custom, to the detriment of its competitors, because it instructs its drivers to ignore speed limits and jump red lights (Lord Walker in OBG Ltd. v. Allan [2007] UKHL 21; [2007] 2 WLR 920 , para. 266) should not be liable, even if the claim be put as a claim in conspiracy involving its drivers and directors. And — as in relation to the tort of causing loss by unlawful means inflicted on a third party — there is a legitimate objection to making liability “depend upon whether the defendant has done something which is wrongful for reasons which have nothing to do with the damage inflicted on the claimant”: per Lord Hoffmann in OBG Ltd. v. Allan at para. 59.

No one in these cases appears to have felt it necessary to explain why the pizza plotters would escape liability. Lord Nicholls’s “instrumentality” test in OBG appears to require that the unlawful act be instrumental in the harm caused to the claimant, in other words to be causative in some way that is more than merely incidental. Does it require that the claimant be directly and immediately harmed by the unlawful act, or that the act be targeted at the claimant? Lord Nicholls’s reference to the road traffic offences not being “committed against” the rival pizza producer suggests as much.

Yet in a scheme where the only reason why the harm occurs is because delivery riders break speed limits and jump red lights, and where harming the rival business is the specific  and sole purpose of instructing the riders to do it, why is that criminal conduct not the means by which harm is intended to be, and is, caused? No other means are suggested, and no intermediate cause is proposed as breaking the chain of causation. The criminality does not seem to be merely “an element of unlawfulness somewhere in the story”.

Later Interpretation: JSC BTA Bank v Khrapunov [2018]

By 2018 the House of Lords had become the Supreme Court, and the definition of unlawful means in conspiracy claims was under consideration in JSC BTA Bank v Khrapunov [2018] UKSC 19. Lords Sumption and Lloyd-Jones, while providing a brief history of the development of the law of conspiracy, attempted an interpretation of Lord Mance’s pizza reference in Total Network:

“14. These two varieties of intention were to be contrasted with a situation in which the harm to the claimant was purely incidental because the unlawful means were not the means by which the defendant intended the harm to the claimant: see paras 93, 95. As an example of the latter situation, Lord Walker cited Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173. The defendants in that case were alleged to have acted in breach of the statutory order imposing sanctions on Southern Rhodesia, but the order “was not the instrument for the intentional infliction of harm” (para 95). Lord Mance in Total Network (para 119) was, we think, making the same point, by reference to the example of a pizza delivery business which obtains more custom, to the detriment of its competitors, by instructing its drivers to ignore speed limits and jump red lights.”

In Khrapunov the Court held that most, but probably not all, unlawful acts were sufficient for unlawful means conspiracy – and specifically that criminal contempt of court could be sufficient – so long as the unlawful conduct was the means by which harm was intentionally caused. While the speeding pizza deliverers were only mentioned uncertainly in passing, it was again perhaps unhelpful not to make it clear why their behaviour would not give rise to liability as being “the instrument for the intentional infliction of harm.” The contempt of court in Khrapunov – breaching a freezing order – plainly intentionally caused harm to the party that had obtained the freezer. Why was cutting corners illegally to deliver fresher pizzas not in the same category? It was apparently too obvious to require explanation.

Squaring the Circle: Racing Partnership Limited and others v Sports International Services Limited [2020]

Arnold LJ seems to have been the first to question this in a judgment. In the Court of Appeal’s judgment in Racing Partnership Limited and others v Sports International Services Limited [2020] EWCA Civ 1300, at 151 he traced the pizza notion from its origins in OBG through the cases cited above, and questioned why the courier/pizza example was not “instrumental”. At 152 he said this about OBG:

“… while the requirement of instrumentality seems clear, I do not find it easy to understand why it is not present in the courier example. The same example, substituting a pizza delivery business for a courier service, was referred to by Lord Walker at [266]. Although Lord Walker appeared to agree that there should be no liability in this example, he hesitated to accept the test of instrumentality at [268]-[269].”

153. Although Lord Nicholls’ test did not gain the acceptance of the majority of the House of Lords in OBG v Allan, it was approved by Lord Walker in Commissioners v Total [Network] at [95]. Lord Scott of Foscote agreed with Lord Walker at [47], as did Lord Neuberger at [217], [222] and [225]. Lord Mance agreed at least to some extent with Lord Walker at [116], and in particular he agreed that the pizza delivery business should not be liable at [119], although he did not explicitly endorse the test of instrumentality. Moreover, the test was accepted by Lord Sumption and Lord Lloyd Jones in Ablyazov [i.e. Khrapunov] at [14]:

At para 153 Lord Justice Arnold sought to square the circle by introducing wholly new factual elements to the pizza case: that the pizza customers were unaware that the law had been broken, and, importantly, that some of them had other reasons for choosing to order pizzas from the defendant.

“154. It seems to me that the discussions of instrumentality in the case law tend to conflate two different questions. The first concerns the defendant’s intention. As noted above, it is now well established that, in unlawful means conspiracy, the defendant must intend to injure the claimant, although that need not be the defendant’s predominant intention and it is sufficient that the defendant intends to advance their economic interests at the expense of the claimant’s. To that extent, the defendant’s intention must be directed at the claimant. The second question is one of causation. The unlawful means must have caused loss to the claimant, rather than merely being the occasion of such loss being sustained. As I see it, this is the best explanation of the courier service/pizza delivery example: in that example the claimant’s loss is caused by customers (who may be presumed not to appreciate that the defendant is systematically breaking the law and some of whom may prefer the defendant’s service for other reasons) choosing to place their orders with the defendant, and so the unlawfulness is the occasion for the loss rather than the direct cause of it.”

It is not immediately obvious why the customers’ knowledge of the lawbreaking should make a difference to the question whether it was a cause of the loss, but plainly if some customers chose the defendant ‘s pizzas regardless of the speed with which they arrived then, in those cases at least, causation between the illegal driving and the harm done to the honest pizza business is wholly absent.

Conclusion

Though six years have since passed, it is to be hoped that that was not the very last judicial word on the subject. The time has surely come to consign the pizza example to the dustbin of legal history. The Supreme Court needs an opportunity to clear this up once and for all. It could clarify whether the “means” element of unlawful means involves both intention and causation. And its members must be able to think of better examples, illustrating situations in which unlawfulness does and does not cross the line into being instrumental. It would be even more helpful to explain precisely why, in each case, the example falls on its side of that line.

More generally it would be welcome if courts, when (commendably) searching for colourful illustrations to make a point clear, could ensure that their chosen factual scenario is precisely described, and that the point really is helpfully illustrated by it, before letting their creations loose.