In a recent case, Domestic & General Group Limited (D&G), an insurance company, has successfully challenged rogue traders using the tort of unlawful means conspiracy.
The defendant ‘rogue traders’ were cold calling customers of D&G, purporting to represent D&G. Many of D&G’s customers were induced, through fraudulent misrepresentations, to take out plans with the defendant traders, and cancel their plans with D&G.
This is a novel use of the tort and it leaves the door open to crack down on other types of scams of this nature. Lots of people will be familiar with receiving cold calls of a similar nature, and while they are an annoyance to customers, they can end up costing businesses dearly. This decision gives recourse to businesses who have been caught up in the acts of dishonest rogue traders.
Read the full decision here: Domestic & General Group Limited & Ors v Premier Protect Holdings Limited & Ors [2024] EWHC 2654 (KB)
Elements of the tort of unlawful means conspiracy
The elements of the tort of causing loss by unlawful means are set out as follows in Clerk & Lindsell on Torts, 23rd ed (2020) at para 23.78:
- There must be an intention to cause loss to the claimant;
- use of “unlawful means” against a third party; and
- interference with that third party’s freedom to deal with the claimant.
The alleged unlawful means in the present case was the tort of deceit. The defendant traders were making calls to customers and making false representations to induce them to take out plans with the defendant traders. In many cases, the false representation had the intended effect, and customers of D&G took out plans with the defendant traders instead.
That was sufficient to decide that the defendants used “unlawful means” against the customers.
Interference with the freedom to deal with D&G
However, the third limb of the test caused some debate, as to whether the misrepresentations affected the customers’ freedom to deal with D&G.
On the one hand, the customers’ freedom to deal with the claimants was affected at the time when they decided to cancel their plan with D&G.
On the other hand, once customers discovered that they had two plans covering the same appliance, they were free to chose which plan to cancel.
The judge agreed that customers indeed had a choice whether or not to cancel their direct debits or plans. But, importantly, their exercise of that choice was impaired by the deception practised on them. It is not a requirement that the customers’ freedom was completely overborne, merely that it was interfered with.
On that basis, the judge held that the elements of the tort had been satisfied.
Comment
This decision is part of long-running litigation which dates back to early 2021 when the claim was first issued. There have been three separate interim injunction applications, and two applications for contempt of court, which were all successful.
While scams of this nature have often been difficult to identify and stamp out, the court is able to use the tools at its disposal to impose sanctions on unscrupulous traders, once the main actors are identified.
In this case, the claimants logged customer complaints about the issue on a system called “ChitChat” which helped them to identify the parties against whom they wanted to bring the claim. Keeping documentary records like this is an invaluable resource for businesses when it comes to defending themselves against rogue traders.
