In Secretary of State for Health and another v Servier Laboratories and others  UKSC 24, the Supreme Court unanimously dismissed an appeal relating to the tort of causing loss by unlawful means. The unlawful means tort is an economic tort which consists of acts that are intended to cause loss to the claimant via interference with the freedom of a third party in an unlawful manner.
In making its decision, the Supreme Court held that OBG Ltd v Allan  UKHL 21 (“OBG”) had laid down that a necessary element of the unlawful means tort is that the unlawful means should have affected the third party’s freedom to deal with the claimant, known as “the dealing requirement”.
The respondent (Servier Laboratories) was granted a patent by the European Patent Office (“EPO”) relating to medicinal drugs. The appellant (the Secretary of State for Health) claimed damages based on the unlawful means tort, alleging that Servier Labs obtained grant of the patent on the basis of misrepresentations regarding the patentability of the invention, arguing that this caused economic loss to the NHS, through the patent preventing generics entering the market. The patent was subsequently challenged, which led to its revocation by the EPO Technical Board of Appeal.
The Supreme Court provided the following reasoning as to why the dealing requirement was a necessary element:
- Firstly, it is consistent with Lord Hoffmann’s explanation in OBG of the rationale of the unlawful means tort, which is to preserve a person’s liberty to deal with others.
- Secondly, it is clear from the wording of paragraphs 47-51 of Lord Hoffmann’s leading speech that he regarded the dealing requirement as an essential element.
- Thirdly, Lord Hoffmann justified the dealing requirement through an analysis of several key authorities, all of which he explained by reference to there being no dealings between the claimant and the third party.
- Fourthly, the dealing requirement is consistent with the authorities in which liability for the unlawful means tort has been established (which all involved dealings).
- Fifthly, the dealing requirement is consistent with the concern that the tort be kept within reasonable bounds.
- Sixthly, it is apparent that the other members of the OBG majority understood and endorsed the proposed definition of the tort to include a dealing requirement.
- Seventhly, OBG has been understood to impose a dealing requirement by the courts both in this country and elsewhere in the Commonwealth.
The appellant contended that the dealing requirement is an unnecessary addition to the essential elements. However, in failing to advance any real-world issues caused as a consequence of its inclusion, the Supreme Court did not depart from OBG. The court held that the dealing requirement performs the valuable purpose of delineating the degree of connection which is required between the unlawful means being used and the damage that is suffered. This was deemed particularly important where a tort permits recovery for pure economic loss and by persons other than the immediate victim of the wrongful act. The dealing requirement also acts to minimise the danger of there being indeterminate liability to a wide range of claimants.