The Taff Vale Case
All this development of the Law of Conspiracy and the Law of Torts, though it went far to render nugatory the intention of the Legislature in 1871-76 to make lawful a deliberately concerted strike, left unchallenged the position of the Trade Union itself as immune from legal proceedings against its corporate funds, an anomalous position which everybody understood to have been conceded by the Acts of 1871-76. In 1901, after thirty years of unquestioned immunity, the judges decided, to the almost universal surprise of the legal profession as well as of the Trade Union world, that this had not been enacted by Parliament. In 1900 a tumultuous and at first unauthorised strike had broken out among the employees of the Taff Vale Railway Company in South Wales, in the course of which there had been a certain amount of tumultuous picketing, and other acts of an unlawful character. In the teeth of the advice of the Company’s lawyers, Beasley, the General Manager, insisted on the Company suing for damages, not the workmen guilty of the unlawful acts, but the Amalgamated Society of Railway Servants itself; and on fighting the case through to the highest tribunal. After elaborate argument, the Law Lords decided that the Trade Union, though admittedly not a corporate body, could be sued in a corporate capacity for damages alleged to have been caused by the action of its officers, and that an injunction could be issued against it, restraining it and all its officers, not merely from criminal acts, but also from unlawfully, though without the slightest criminality, causing loss to other persons. Moreover, in their elaborate reasons for their judgement, the Law Lords expressed the view that not only an injunction but also a mandamus could be issued against a Trade Union, requiring it to do anything that any person could lawfully call upon it to do; that a registered Trade Union could be sued in its registered name, just as if it were a corporation; that even an unregistered Trade Union could be made collectively liable for damages, and might be sued in the names of its proper officers, the members of its executive committees and its trustees; and that the damages and costs could be recovered from the property of the Trade Union, whether this was in the hands of separate trustees or not. The effect of this momentous judgement, in fact, was, in flagrant disregard of the intention of the Government and of Parliament in 1871-76, to impose upon a Trade Union, whether registered or not, although it was still denied the advantages and privileges of incorporation, complete corporate liability for any injury or damage caused by any person who could be deemed to be acting as the agent of the Union, not merely in respect of any criminal offence which he might have committed, but also in respect of any act, not contravening the criminal law, which the judges might hold to have been actionable. The Amalgamated Society of Railway Servants, which had not authorised the Taff Vale strike nor any wrongful acts that were committed by the strikers, but which, after the strike had occurred, had done its best to conduct it to a successful issue, and had paid Strike Benefit, was compelled to pay £23,000 in damages, and incurred a total expense of £42,000. [656] It has been estimated that, from first to last, the damages and expenses in which the various Trade Unions were cast, owing to this, and the other judgements against Trade Unions and Trade Union officials personally, amounted to not less than £200,000.
The little world of Trade Union officials, already alarmed at the prospect of being individually sued for damages, was thrown into consternation by the Taff Vale judgement, which seemed to destroy, at a blow, the status that had been, with so much effort, acquired in 1871-76. The full extent of the danger was not at first apprehended. Why, it was asked, should not the Trade Union rules, and the instructions of Trade Union Executive Committees, expressly forbid the commission by officials of any wrongful acts? It was only gradually realised that, under the figment of “conspiracy to injure” that the lawyers had elaborated, even the most innocent acts, which an individual could quite lawfully commit, might be held wrongful and actionable if they were committed by or on behalf of an association to the pecuniary injury of any other person; and that there was no assignable limit, as the cases had shown, either to what might be held to be wrongful acts, or to the nature or amount of the damage that the Courts might hold to have been caused by such acts in the ordinary course of any extensive strike. Moreover, under the ordinary law of agency, the most explicit prohibition of unlawful acts in the rules of the association, coupled with the most scrupulous care in the Executive Committee in framing its instructions to its officials, would not prevent the Trade Union from being held liable for any pecuniary injury that might be caused, even in defiance of instructions and in disobedience to the rules, by any of its officers acting within the scope of their employment; or, indeed, by any member, paid or unpaid, whom the Courts might hold to be acting as the agent of the Union. And as every stoppage of work, however lawful, necessarily involved financial loss to the employers, it could be foreseen that even the most carefully conducted strike might be made at least the occasion for costly litigation, and probably the opportunity for getting the Trade Union cast in swingeing damages. The immediate result was very largely to paralyse the Executive Committees and responsible officials of all Trade Unions, and greatly to cripple their action, either in securing improvements in their members’ conditions of employment or in resisting the employers’ demands for reductions. In particular, the general advances for which the railway workers were asking were delayed. The capitalists did not fail to use the opportunity to break down the workmen’s defences. Trade Unionism had to a great extent lost its sting. [657]
Though it took some time for the Trade Union world to realise the peril, the effect on the Movement was profound. Up and down the country every society, great and small, and practically every branch, rallied in defence of its right to exist. The first result was to make the newly-formed Labour Party, which will be hereafter described, and which had hitherto hung fire, into an effective political force. The effect of the Taff Vale judgement was, in 1902-3, to double, and by 1906-7 to treble the number of adhering Trade Unions, and to raise the affiliated membership of the Party to nearly a million. As the Dissolution of Parliament approached, the Trade Unions organised a systematic canvass of all prospective candidates, making it plain that none would receive working-class support unless they pledged themselves to a Bill to undo the Taff Vale judgement and put back Trade Unionism into the legal position that Parliament had conferred upon it in 1871. When the General Election at last took place, in January 1906, the Labour Party (still known as the Labour Representation Committee) put no fewer than fifty independent candidates in the field, of whom, to the astonishment of the politicians, twenty-nine were at the head of the poll. [658]