The Secretary of State for Health & Anor v Servier Laboratories Ltd & Ors

The tort of causing loss by unlawful means requires the defendant’s wrongful conduct towards a third party to interfere with that third party’s liberty to deal with the claimant. The requirement applies whether the third party is a private person or a public authority. A claim cannot avoid it by alleging deceit intended to influence a public authority’s decision where the authority has no dealings with the claimant. OBG Ltd v Allan is binding on this point. Earlier authority concerning fraud on a public official did not decide the issue or establish a wider rule. The claim was therefore bound to fail and was struck out.

The NHS appealed against Roth J’s order striking out its claim that Servier was liable in the tort of causing loss by unlawful means: [2017] EWHC 2006 (Ch). The NHS alleged that Servier had obtained and defended a pharmaceutical patent by deceit before the European Patent Office and the English courts, delaying generic competition and causing the NHS to pay higher prices.

Roth J held that the tort required unlawful conduct actionable by the third party, an intention to injure the claimant, and interference with the third party’s freedom to deal with the claimant. The central issue was whether that last requirement applied where the alleged wrong was directed at public authorities which had no dealings with the claimant.

1. Appeal dismissed. The strike-out was upheld. On the assumed facts, the alleged deceit of the EPO and the English courts could not satisfy the unlawful means tort because it did not interfere with their liberty to deal with the NHS.
2. The Court of Appeal held that the second sentence of Lord Hoffmann’s speech in OBG Ltd v Allan [2007] UKHL 721 stated an essential ingredient of the tort in every case. The tort requires wrongful interference with the actions of a third party in which the claimant has an economic interest, an unlawful act actionable by that third party or actionable if loss had been suffered, and an intention to cause loss to the claimant. The interference must affect the third party’s freedom to deal with the claimant.
3. The court rejected the argument that Lonrho plc v Fayed [1990] 2 QB 479 established a general non-dealing category. The issue in that case was whether the unlawful means had to constitute a complete cause of action including loss to the third party. Its boundaries were expressly left for later refinement. Lord Hoffmann’s reference to it in OBG concerned the separate point that lack of loss to the third party did not prevent conduct from being unlawful means where it would otherwise have been actionable.
4. The pre-OBG authorities were treated as dealing cases involving interference with the third party’s dealings. OBG was materially different from the caution in Frozen Value Ltd v Heron [2012] EWCA Civ 473: the issue had been argued, analysed comprehensively and applied to the facts, although the House of Lords did not need to decide the alternative claim dispositively.
5. The court noted the procedural route by which the NHS could seek an undertaking as to damages when a pharmaceutical interim injunction might affect NHS purchases. That observation did not affect the legal conclusion.

The claim was correctly struck out because it was bound to fail on the pleaded and assumed facts.

• Court of Appeal (Civil Division) — The appeal against the strike-out order was dismissed: [2019] EWCA Civ 1160.
• High Court of Justice, Chancery Division — Roth J struck out the NHS’s unlawful means tort claim: [2017] EWHC 2006 (Ch).