Taff Vale Case
Encyclopedia
Taff Vale Railway Co v Amalgamated Society of Railway Servants [1901] UKHL 1, commonly known as the Taff Vale case is a formative case in UK labour law. It held that at common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

, unions could be liable for loss of profits to employers that were caused by taking strike action.

Taff Vale was met with outrage by the labour movement, was a central cause in the establishment of the UK Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...

 and was soon reversed by the Trade Disputes Act 1906
Trade Disputes Act 1906
The Trade Disputes Act 1906 was an Act of the Parliament of the United Kingdom passed under the Liberal government of Sir Henry Campbell-Bannerman...

. It was reversed at common law in Crofter Hand Woven Harris Tweed Co Ltd v Veitch.

Facts

A trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

, called the Amalgamated Society of Railway Servants
Amalgamated Society of Railway Servants
The Amalgamated Society of Railway Servants was a trade union of railway workers in the United Kingdom from 1872 until 1913.The ASRS was an industrial union founded in 1871 with the support of the Liberal MP Michael Bass. Its early years were difficult...

, went on strike
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...

 due to the unfair treatment of John Ewington, who had been refused higher pay and was punished for his repeated requests by being moved to a different station. When the Taff Vale Railway
Taff Vale Railway
The Taff Vale Railway is a railway in Glamorgan, South Wales, and is one of the oldest in Wales. It operated as an independent company from 1836 until 1922, when it became a constituent company of the Great Western Railway...

 Company employed replacement staff, the strikers engaged in a sabotage campaign, greasing the rails and uncoupling the carriages. The Taff Vale Railway Company thus decided to engage with the union for the purpose of collective bargaining
Collective bargaining
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions...

 and the workers returned to work. The Railway Company however, decided to sue the union for damages and won.

Previously it had been thought that trade unions could not be sued, because they were unincorporated entities
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...

, under the law of trusts.

Farwell J held in favour of the company. His decision was reversed by the Court of Appeal, but restored on further appeal to the House of Lords.

Judgment

The House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....

 ruled that if a union is capable of owning property, and capable of inflicting harm on others, then it is liable in tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...

 for the damage it causes. Here, the damage was said to be the economic loss caused to the company when the employees broke their contracts of employment to go on strike. So the Taff Vale Railway Co was successful in suing for damages. It was awarded £23,000 plus court costs, reaching a total of £42,000. This set the precedent
Precedent
In common law legal systems, a precedent or authority is a principle or rule established in a legal case that a court or other judicial body may apply when deciding subsequent cases with similar issues or facts...

 that unions could be held liable for damages resulting from actions by its officials. The Earl of Halsbury LC began.
Lord MacNaughten delivered the leading judgment.
Lord Shand's judgment was read as followed.
Lord Brampton concurred.
Lord Lindley, an expert on partnership law concurred.

Significance

Balfour's Conservative
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...

 government later set up a Royal Commission
Royal Commission
In Commonwealth realms and other monarchies a Royal Commission is a major ad-hoc formal public inquiry into a defined issue. They have been held in various countries such as the United Kingdom, Australia, Canada, New Zealand, and Saudi Arabia...

, a decision that was unpopular among trade unionists. The decision was a turning point for the newly formed Labour Representation Committee. Affiliation from trade unions to the LRC stood at 350,000 in 1901 but rose to 450,000 in 1902 and 850,000 in 1903. A mass movement was being formed that led to the creation of the modern Labour Party (UK)
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...

. Subsequently the Labour party was elected in a significant minority of the seats in Parliament, and in partnership with the Liberal government, passed the Trade Disputes Act 1906
Trade Disputes Act 1906
The Trade Disputes Act 1906 was an Act of the Parliament of the United Kingdom passed under the Liberal government of Sir Henry Campbell-Bannerman...

. This overrode the ruling in Taff Vale and provided the foundation for the law on the right to strike in the UK, that no cause of action could be brought against a trade union for economic loss, if a strike was "in contemplation or furtherance of a trade dispute".

See also

  • Trade Disputes Act 1906
    Trade Disputes Act 1906
    The Trade Disputes Act 1906 was an Act of the Parliament of the United Kingdom passed under the Liberal government of Sir Henry Campbell-Bannerman...

  • Quinn v Leatham [1901] AC 495 HL
  • South Wales Miners' Federation v Glamorgan Coal Co [1905] AC 239
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