Rookes v Barnard [1964] UKHL 1

A non-union employee was dismissed after union officials threatened an illegal strike in breach of a no-strike agreement. The House of Lords recognised the tort of intimidation based on a threat to breach a contract and established restrictive new categories for awarding exemplary damages.

Facts

The appellant, Mr Rookes, was a skilled draughtsman employed by the British Overseas Airways Corporation (B.O.A.C.) at London Airport. He was a member of the Association of Engineering and Shipbuilding Draughtsmen (A.E.S.D.), a registered trade union. Following a disagreement, Mr Rookes resigned from the union in November 1955. At the time, there was an informal ‘closed shop’ agreement that 100% of draughtsmen at the site would be union members. The union’s agreement with B.O.A.C. also contained a ‘no-strike’ clause, explicitly prohibiting industrial action without following a specific procedure.

The respondents, Mr Barnard, Mr Fistal, and Mr Silverthorne, were all officials or members of the A.E.S.D. Upon Mr Rookes’ resignation, they and other union members passed a resolution in January 1956, informing B.O.A.C. that if Mr Rookes was not removed from his position, all union members would withdraw their labour (i.e., strike). This threatened strike would have been a direct breach of the ‘no-strike’ clause in their employment contracts with B.O.A.C. Faced with this threat of unlawful industrial action, B.O.A.C. first suspended Mr Rookes and then, in March 1956, terminated his employment with proper notice and pay in lieu.

Issues

The House of Lords considered several key legal issues:

1. Whether there exists a tort of intimidation, and if so, whether it is limited to threats of criminal or tortious acts, or if it also includes threats to breach a contract.
2. Whether the respondents’ threat to B.O.A.C. to induce a strike in breach of their contracts constituted unlawful means for the purpose of the tort of intimidation.
3. Whether the respondents were protected from liability by section 3 of the Trade Disputes Act 1906, which provides immunity for acts done in contemplation or furtherance of a trade dispute.
4. The correct principles for the award of exemplary (or punitive) damages in tort.

Judgment

The House of Lords (Lord Evershed dissenting) allowed the appeal, finding that the respondents were liable for the tort of intimidation. The majority held that the tort of intimidation was not confined to threats of violence or tortious acts but extended to threats of breaching a contract.

The Tort of Intimidation

Lord Reid, delivering one of the leading speeches, reasoned that there was no logical distinction between a threat to commit a tort and a threat to break a contract when used to coerce a party to injure another. He stated:

So the question is whether it is a tort to conspire to threaten an employer that his men will break their contracts with him unless he dismisses the plaintiff. In my view it is… It is clear that if there had been a threat of violence he would have had a cause of action… I can see no good reason why the appellant should not have a right of action.

The court affirmed that where A delivers a threat to B that he will commit an unlawful act against B unless B acts to the detriment of C, C has a cause of action against A for intimidation.

The Trade Disputes Act 1906

The court held that the immunity provided by the 1906 Act did not cover the respondents’ actions. Lord Reid concluded that Section 3 of the Act, which protects against liability for inducing a breach of an employment contract, did not extend to protect against liability for intimidation by threatening a breach of contract.

Exemplary Damages

Lord Devlin delivered a seminal judgment that fundamentally reshaped the law on exemplary damages, restricting their availability to narrow circumstances. He established three categories where such damages could be awarded:

These two categories are, I think, sufficient to cover the case law. They are: first, oppressive, arbitrary or unconstitutional action by the servants of the government… Secondly, cases in which the defendant’s conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to him… There is a third category of case for which I have not been able to find any English authority and which may be obsolescent. It is where a statute authorises an award of exemplary damages…

The court found that the jury had been misdirected on the question of damages, as the facts of this case did not fall into any of these categories, and the initial award of £7,500 was excessive. A new trial was therefore ordered solely on the assessment of damages.

Implications

The decision in Rookes v Barnard had profound implications for UK law. Firstly, it firmly established that the tort of intimidation could be founded on a threat to breach a contract, significantly expanding the scope of economic torts. Secondly, it created a major vulnerability for trade unions by confirming that threatening a strike in breach of contract was an unlawful act not protected by the Trade Disputes Act 1906. This led directly to Parliament passing the Trade Disputes Act 1965 to reverse this part of the decision. Thirdly, and most enduringly, Lord Devlin’s categorisation of exemplary damages became the definitive authority on the subject in England and Wales, heavily restricting their application and influencing jurisprudence across the Commonwealth.

Verdict: Appeal allowed. New trial ordered on the question of damages.

Source: Rookes v Barnard [1964] UKHL 1