Economic torts

How BC law treats it

Economic torts are judge-made law. Canada has no general tort of unfair competition, so hard competition is lawful unless it fits a recognized category. The main categories are inducing breach of contract (knowingly persuading someone to break an existing contract), causing loss by unlawful means, civil conspiracy, passing off, deceit (fraudulent misrepresentation) and injurious falsehood (false statements about a business's goods or title that cause loss). The unlawful means tort is narrow. In A.I. Enterprises Ltd v Bram Enterprises Ltd, 2014 SCC 12, the Supreme Court held it applies only where the defendant commits an act against a third party that would be actionable by that third party, or would be if it had suffered loss, and the act intentionally causes economic harm to the plaintiff. Civil conspiracy covers an agreement to injure the plaintiff as the predominant purpose, or an agreement to use unlawful conduct directed at the plaintiff where injury was likely (Canada Cement LaFarge Ltd v British Columbia Lightweight Aggregate Ltd, [1983] 1 SCR 452). Some statutes sit beside these torts. The Competition Act, RSC 1985, c C-34, s. 36 gives a private damages action for losses from its criminal offences, such as price fixing, but does not create a general unfair competition claim. Where a business claim involves statements on matters of public interest, the defendant may apply to dismiss it early under the Protection of Public Participation Act, SBC 2019, c 3. Most economic tort claims must be started within two years of discovery under the Limitation Act, SBC 2012, c 13.

What it means for your business

Economic torts are the main tools when a competitor poaches a key contract, a former partner diverts customers, or rivals spread false claims about a product. They also create risk: a business that hires a competitor's staff or encourages a customer to switch suppliers mid-contract may face an inducing breach claim. Knowing the narrow limits of these torts helps a business avoid weak claims and anticipate real exposure. Example: A Coquitlam supplier learns that a competitor, knowing of its three year exclusive supply contract with a restaurant chain, offered the chain a payment to terminate early. The supplier may sue the competitor for inducing breach of contract and the chain for breach of contract.

Risks and common mistakes

Pleading a general tort of unfair competition, which does not exist in Canadian law. Framing an unlawful means claim on conduct that would not be actionable by the third party. Missing the two year limitation period while trying to negotiate. Suing over public statements without considering an early dismissal application under the Protection of Public Participation Act. Assuming the Competition Act gives a damages claim for any unfair business practice.