Civil Conspiracy.

What is Civil Conspiracy?

Civil conspiracy is a common law tort that holds multiple parties liable when they agree to act together in a way that causes economic harm to another. The term derives from the Latin conspirare, meaning "to breathe together," reflecting the core concept of coordinated wrongdoing. Unlike other economic torts, conspiracy requires proof of an agreement between two or more people. Acting alone, the same conduct might not attract liability.

What makes conspiracy unusual is that it is not simply joint tortfeasance. As the UK Supreme Court explained in JSC BTA Bank v. Ablyazov[2015] UKSC 64. Confirms conspiracy as a distinct tort with primary liability., conspiracy is a distinct tort with primary liability. The fact of combination can alter the legal character of acts that would be lawful if done individually. In other words, plurality itself can convert otherwise permissible conduct into tortious conduct.

Canadian courts recognize civil conspiracy as an established cause of action, though its scope and rationale have been subject to judicial scrutiny. The tort protects against coordinated economic harm, whether inflicted through lawful or unlawful means, and serves as a check on concerted conduct designed to injure business interests.

Historical Development and Purpose

Civil conspiracy has medieval origins. It began as an action providing civil redress where two or more persons combined to abuse the court's criminal process. Over time, the writ evolved into an action on the case and flourished in the nineteenth century, largely as a judicial tool to regulate activities by organized labour and rival entrepreneurs.

The tort developed differently in Commonwealth jurisdictions than in the United States. American courts remained skeptical of the premise that mere numbers could convert lawful conduct into unlawful conduct. Many U.S. jurisdictions rejected civil conspiracy entirely or adopted it only in narrow forms. Instead, American law developed independent doctrines such as unfair competition and the prima facie tort doctrine, which provide courts with broader remedies not dependent on combination.

In contrast, English and Commonwealth courts embraced conspiracy to regulate industrial and commercial disputes and to reinforce laissez-faire economic principles. The classic articulation came in Mogul Steamship Co. v. McGregor, Gow and Co.(1889) 23 QBD 598 (CA), aff'd [1892] AC 25 (HL)., where Bowen L.J. explained that combination may make "oppressive or dangerous that which if it proceeded only from a single person would be otherwise."

The House of Lords in Lonrho Ltd. v. Shell Petroleum Co.[1982] AC 173 (HL). questioned this foundation. Lord Diplock observed that modern economic realities cannot be ignored. Nevertheless, the court retained predominant purpose conspiracy because it was too deeply embedded in precedent to be reversed. Canadian law followed a parallel evolution. The Supreme Court of Canada in Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd.[1983] 1 S.C.R. 452. The leading Canadian authority on unlawful means conspiracy. acknowledged conspiracy as a judicial anachronism but concluded it was too late to uproot it from the common law.

Two Varieties of Conspiracy

Modern Canadian law recognizes two forms of civil conspiracy, terminology clarified by the Supreme Court in Pro-Sys Consultants Ltd. v. Microsoft Corp.2013 SCC 57, [2013] 3 S.C.R. 477.:

1. Predominant Purpose Conspiracy: Liability arises when two or more persons agree to engage in conduct (lawful or unlawful) where the predominant purpose is to injure the plaintiff, and damage results. The tortious quality stems from the fact of acting together with this malicious purpose, not from the means used.
2. Unlawful Means Conspiracy: Liability arises when two or more persons agree to engage in unlawful conduct directed at the plaintiff, injury is foreseeable, and damage results. Here the tortious quality stems from both the unlawful means and the fact of combination. Injury need not be the predominant purpose, but there must be at least constructive intent to harm.

The distinction is crucial. Predominant purpose conspiracy can be committed using entirely lawful means, provided the conspirators' main objective is to harm the plaintiff. This is an anomaly: it makes combination itself wrongful when accompanied by malicious intent. Unlawful means conspiracy, by contrast, requires unlawful conduct but does not require that harming the plaintiff be the main objective.

Predominant Purpose Conspiracy Elements

To succeed in a claim for predominant purpose conspiracy, the plaintiff must prove:

1. An agreement between two or more persons to engage in conduct (whether lawful or unlawful);
2. The predominant purpose of the agreement is to injure the plaintiff; and
3. The plaintiff suffers damage as a result.

This form of conspiracy is unusual because it renders otherwise lawful conduct actionable based solely on the conspirators' malicious intent. The rationale is that coordinated action motivated by a desire to harm, rather than to advance legitimate interests, is inherently wrongful.

Unlawful Means Conspiracy Elements

To succeed in a claim for unlawful means conspiracy, the plaintiff must prove:

1. An agreement between two or more persons to engage in conduct;
2. The conduct is directed at the plaintiff (alone or together with others);
3. The means employed are unlawful; and
4. The defendants should know in the circumstances that injury to the plaintiff is likely to result, and damage does result.

As articulated in Canada Cement LaFarge, this form requires "constructive intent" to injure. The defendants must have known or ought to have known that their unlawful conduct would harm the plaintiff. Predominant purpose to injure is not necessary, but the unlawful means must be directed toward the plaintiff, not merely incidental to some other objective.

Agreement Between Two or More

The foundation of conspiracy is an agreement. As stated in Mulcahy v. The Queen(1868) LR 3 HL 306., "a conspiracy consists not merely in the intention of two or more, but in the agreement of two or more." The agreement constitutes a joint plan or common design and need not amount to a legally enforceable contract.

Individual defendants are liable only if they intentionally participate in the agreement. Mere knowledge of or acquiescence in the conspiracy is insufficient. Making an agreement is not the same as simply "being in agreement." Directors who all vote the same way at a meeting are not thereby conspiring unless they entered into a compact in advance.

Although direct evidence of an agreement is preferred, conspiracy can be established by inference from circumstantial evidence, provided the facts cannot fairly admit any other reasonable explanation. The law recognizes that conspirators rarely document their schemes. Evidence of parallel conduct, coordinated timing, common interests, and communication between alleged conspirators may support an inference of agreement.

An overt act in furtherance of the agreement is required. Unlike criminal conspiracy, the civil tort is not complete until the conspirators take steps to execute their plan and damage results. Pleadings must specify the overt acts and attribute them to the appropriate defendants. Corporations can be parties to conspiracies, and a company can conspire with its directors since a corporation is a separate legal entity.

Purpose to Injure the Plaintiff

The leading authority on this element is Crofter Hand Woven Harris Tweed Co. v. Veitch[1942] AC 435 (HL). Leading authority on the predominant purpose test.. In that case, union officials instructed dockers to refuse handling the plaintiff's yarn, causing economic loss. The House of Lords held the conspiracy was not actionable because the predominant purpose was promoting the union's legitimate self-interest, not injuring the plaintiff.

Several principles emerge from Crofter and subsequent cases:

• The test focuses on the true purpose or object of the combination, not the natural or probable result of the defendants' actions.
• "Object" means the ultimate end or goal. It is distinguished from "motive" or "immediate purpose."
• Where multiple objects exist, liability depends on the predominant object.
• A conspiracy whose predominant object is to injure the plaintiff is unlawful.
• If the predominant object is to advance the conspirators' legitimate self-interest, the combination is lawful.

The burden of proof lies with the plaintiff to establish the unlawful object. Courts examine the defendants' actual purpose, which may be inferred from their conduct and the factual circumstances. Defendants whose primary aim is self-advancement do not commit this tort merely because they foresee harm to a competitor.

Damage to the Plaintiff

An agreement with a predominant purpose to injure is not itself actionable. The defendants must perform overt acts pursuant to the agreement that cause actual damage to the plaintiff. Damage is the gist of the civil action for conspiracy. Without it, no tort is complete.

The weight of authority suggests pecuniary loss is required at least in commercial conspiracy cases. Once established, damages are at large in the sense that specific quantification of each element of loss is not necessary. Aggravated and exemplary damages may be awarded where the conduct warrants such relief.

Means Directed at the Plaintiff

The Supreme Court of Canada fundamentally reshaped unlawful means conspiracy in Canada Cement LaFarge. The defendants were major cement producers found to have violated competition law by conspiring to drive out competitors. The plaintiff, a supplier of aggregate to the cement industry, claimed damages.

Although the defendants' conduct was clearly unlawful, the Supreme Court held no liability existed because the conspiracy was not directed at the plaintiff. The defendants' anticompetitive agreement targeted consumers by keeping concrete prices high. Any harm to the plaintiff, an aggregate supplier, was collateral and incidental, not part of the conspiracy's objectives.

Justice Estey formulated the modern Canadian test: unlawful means conspiracy requires that the unlawful conduct be "directed towards the plaintiff" and that "the defendants should know in the circumstances that injury to the plaintiff is likely to and does result." This imports a requirement of constructive intent to injure, derived from the fact that defendants should have known injury would ensue.

The Unlawful Means

"Unlawful means" has different definitions across economic torts. The Supreme Court of Canada observed in A.I. Enterprises Ltd. v. Bram Enterprises Ltd.2014 SCC 12, [2014] 1 S.C.R. 177. that there is no general requirement of consistency. In unlawful means conspiracy, the term is broader than in the tort of causing loss by unlawful means, where actionability by a third party is required.

Unlawful means in conspiracy includes:

• Independent torts: inducing breach of contract, interference with contractual relations, nuisance, intimidation, defamation, and other actionable civil wrongs.
• Breach of contract: while debated, breach of contract may constitute unlawful means, particularly where it interferes with the plaintiff's economic interests.
• Criminal offences: breach of the Criminal Code, including extortion, fraud, and other indictable offences.
• Statutory violations: breach of regulatory statutes even where no private right of action exists, such as labour relations legislation or competition law.
• Contempt of court: as held in Ablyazov, breach of court orders can constitute unlawful means despite being penal in nature.

Framing a claim in conspiracy offers advantages: it may capture instigators who did not directly participate in the tort, it may support aggravated damages, and it provides evidentiary benefits (statements by co-conspirators are admissible against all).

Statutory & Justification Defences

Several Canadian provinces have enacted legislation excluding civil actions against unions or their members for interference with contracts or trade arising from lawful strikes, picketing, or labour disputes. These provisions offer an effective defence to conspiracy claims in the labour context. For example, British Columbia's Labour Relations CodeRSBC 1996, c.244, s.66. specifically excludes liability for petty trespass, interference with contractual relations, or interference with trade arising from lawful strikes or picketing.

In predominant purpose conspiracy, advancing legitimate self-interest is not technically a "defence" but rather negates an essential element of the tort. If the defendants' predominant purpose was to further their own lawful interests rather than to injure the plaintiff, no unlawful object exists and the tort is not made out. Self-interest encompasses trade and business interests, union interests, and potentially other legitimate objectives.

In unlawful means conspiracy, justification is not available as a defence. The Supreme Court in Canada Cement LaFarge confirmed that once unlawful means directed at the plaintiff with constructive intent are established, the fact that defendants' predominant purpose was self-advancement does not excuse liability.

The doctrine of ex turpi causa non oritur actio (no action arises from one's own wrongdoing) may defeat a conspiracy claim by a participant in the conspiracy who later suffers injury. A party who participated in a conspiracy cannot subsequently claim damages arising from that participation.

Litigation Strategy

Civil conspiracy claims require careful evidence gathering to establish each element. Unlike single-party torts, conspiracy demands proof of coordinated action, which is rarely documented explicitly. Plaintiffs must build their case through direct and circumstantial evidence.

Agreement: Direct evidence (written agreements, recorded conversations, testimony from participants) is ideal but rare. More commonly, plaintiffs rely on circumstantial evidence: parallel conduct by alleged conspirators, meetings or communications between them, common financial interests, coordinated timing of actions, and patterns suggesting a common plan.

Purpose or intent: For predominant purpose conspiracy, plaintiffs must prove the defendants' true objective. For unlawful means conspiracy, constructive intent must be shown: that defendants knew or should have known their unlawful conduct would harm the plaintiff.

Causation and damages: Plaintiffs must prove the conspiracy caused their loss. Financial records, lost contracts, expert testimony on market conditions, and evidence of the plaintiff's business trajectory before and after the conspiracy are typical.

Conspiracy claims often arise alongside other economic torts. Counsel must consider whether to plead conspiracy alone or in combination with inducing breach of contract, interference with economic relations, defamation, intimidation, or causing loss by unlawful means. Each tort has distinct elements and advantages.

Advantages of pleading conspiracy:

• Captures multiple defendants in a single cause of action
• May hold liable instigators and planners who did not personally commit overt tortious acts
• Aggravated and punitive damages may be more readily available
• Evidentiary advantages (co-conspirator statements)

Pleadings must be specific. Courts require plaintiffs to identify the alleged conspirators, describe the agreement with particularity, specify the overt acts committed in furtherance of the conspiracy, and attribute specific acts to specific defendants. Vague or conclusory allegations may be struck out.

Early legal advice is critical. The tort's subtleties, particularly the distinction between the two varieties and the interplay with other economic torts, demand strategic thinking from the outset. Whether to pursue interim injunctive relief, how to preserve evidence of the agreement, and whether to join all potential conspirators or proceed against a subset are threshold decisions that shape the entire litigation.