Tortious Interference & Unlawful Interference With Economic Relations
When a competitor, former partner, or third party deliberately interferes with your business relationships or economic interests through unlawful means, you have options. Our litigation lawyers represent organizations and individuals in Ontario and British Columbia pursuing and defending claims for tortious interference, unlawful interference with economic relations, and related business torts.
Speak With an Unlawful Interference LawyerWhat Is Unlawful Interference with Economic Relations?
Unlawful interference with economic relations is a tort recognized in Ontario and British Columbia that allows a party to seek damages when another person or organization has deliberately disrupted their business or economic interests through means that are independently unlawful. It is one of a family of economic torts that Canadian courts use to address intentional, harmful commercial conduct that goes beyond ordinary competition.
The tort is sometimes called tortious interference, economic interference, or the tort of unlawful interference. The terminology varies, but the core idea is the same: a defendant intentionally directed unlawful conduct at a third party in a way that was intended to cause, and did cause, economic harm to the plaintiff.
To succeed on a claim for unlawful interference with economic relations in Canada, a plaintiff must generally establish three things. First, the defendant engaged in conduct that was unlawful, meaning it independently violated a legal rule, whether a statute, a contract, or another recognized tort. Second, that unlawful conduct was directed at a third party with whom the plaintiff had an economic relationship or economic interest. Third, the defendant intended to cause economic harm to the plaintiff, and that harm resulted.
This is a precise and demanding cause of action. Having litigation counsel who understands the elements and how courts have applied them in Ontario and BC makes a material difference to whether a claim succeeds.
Intentional Interference with Economic Relations and Business Relations
Canadian courts recognize distinct but related torts in this area, and the distinctions matter to how a claim is structured.
Intentional Interference with Economic Relations by Unlawful Means
This is the primary cause of action in this area. It requires that the defendant's conduct was unlawful independently of the tort itself. Courts have found unlawful means in a range of situations: breaches of statute, breaches of contract, intimidation, fraud, and other independently actionable wrongs. The unlawfulness must be directed at a third party, not the plaintiff directly, and the defendant must have intended to harm the plaintiff's economic interests.
Intentional Interference with Business Relations
A related claim, sometimes framed separately, focuses on deliberate interference with specific business relationships such as contracts, ongoing negotiations, or established customer relationships. Where a defendant has taken deliberate steps to cause a third party to breach a contract with the plaintiff, or to prevent a business relationship from continuing, this form of the tort may apply.
Inducing Breach of Contract
Where a defendant has actively persuaded or procured another party to break a contract with the plaintiff, a separate and well-established tort may arise: inducing breach of contract. This does not require that the defendant's means were independently unlawful, but it does require knowledge of the contract and an intention to cause its breach. It frequently overlaps with unlawful interference claims and both are often pleaded together.
These torts are technical and fact-specific. If someone has deliberately undermined your business relationships, the sooner you get legal advice, the stronger your position.
1-800-771-7882 Talk to a Tortious Interference LawyerCommon Situations That Give Rise to These Claims
Unlawful interference with economic relations arises in a range of commercial contexts. The following are situations we see regularly.
Competitor Interference
A competitor makes false statements to your customers, suppliers, or prospective clients about your business, its financial stability, or the quality of your products or services. If those statements are defamatory or fraudulent and are made with the intention of redirecting business, an unlawful interference claim may be available alongside a defamation claim.
Interference by a Former Employee or Partner
A departing employee or former business partner contacts your clients directly, provides confidential information to a competitor, or takes steps to redirect business relationships they developed while working with your organization. Where their conduct involves a breach of contract or breach of confidence, the economic interference element may be met.
Pressure on Suppliers or Customers
A third party uses threats, misrepresentations, or unlawful pressure to cause your suppliers or customers to stop doing business with you. The classic form of this fact pattern involves one party threatening another with unlawful consequences unless they sever their relationship with the plaintiff.
Interference During a Transaction
A deal is progressing and a third party, aware of the transaction, takes deliberate steps to cause it to fall apart, whether by making false representations, by breaching their own obligations in a way that triggers a cascade of consequences, or by other unlawful means.
Defending Against an Interference Claim
Not all conduct that affects a competitor's business relationships is tortious. Legitimate competition, even aggressive competition, does not attract liability. If your organization has been named in a claim for tortious interference or unlawful interference with economic relations, we can assess whether the claim has merit and build your defence around the elements the plaintiff must actually prove.
What Remedies Are Available?
Damages for Economic Loss
The primary remedy is compensation for the economic harm caused by the unlawful interference. This requires proving the loss with reasonable particularity: lost contracts, lost profits, the cost of replacing disrupted relationships, or other quantifiable harm that flows from the defendant's conduct.
Injunctive Relief
Where the interference is ongoing or threatened, an injunction can stop the harmful conduct immediately while the underlying claim is resolved. Obtaining an injunction in this context requires demonstrating a serious question to be tried, irreparable harm if the order is not granted, and a balance of convenience that favours restraining the defendant. Speed is critical. The longer harmful conduct continues, the more damage accumulates and the harder it becomes to quantify.
Punitive Damages
Where the defendant's conduct is particularly egregious, courts in Ontario and BC have awarded punitive damages in economic tort cases. These are not available in every case, but where the conduct was deliberate, calculated, and harmful, they are worth considering as part of the overall claim.
Account of Profits
In some circumstances, where the defendant gained commercially from their interference, the court may order them to account for those profits rather than simply compensating the plaintiff for proven losses. This can be a more effective remedy where the plaintiff's losses are hard to quantify but the defendant's gains are traceable.
The remedies available depend on the facts and how quickly you act. Call us to understand what your situation supports.
1-800-771-7882 Get Advice on an Economic Interference ClaimTortious Interference in Ontario and British Columbia
The tort of unlawful interference with economic relations is recognized in both Ontario and British Columbia, though there are nuances in how courts in each province have developed the law.
Ontario
Ontario courts have addressed unlawful interference with economic relations in a range of commercial contexts, including cases involving competitor conduct, former employees, and deliberate disruption of business transactions. The Superior Court of Justice handles these matters, with urgent applications available on short notice where injunctive relief is required. The two-year limitation period under the Limitations Act, 2002 generally applies, running from discovery of the claim.
British Columbia
BC courts similarly recognize the economic torts and apply them to commercial disputes involving intentional interference with business relationships. The Supreme Court of British Columbia handles these matters. BC's Limitation Act also provides a two-year discovery-based limitation period. Privacy legislation in BC may also be relevant where the interference involved the misuse of personal information.
We practice in both provinces and advise clients on the applicable law, the most advantageous forum, and how the approach to these claims differs between Ontario and BC courts.
Unlawful Interference with Economic Relations: Frequently Asked Questions
What is the difference between tortious interference and unlawful interference with economic relations?
The terms are often used interchangeably and refer to the same family of economic torts. In Canadian law, the more precise label is unlawful interference with economic relations or intentional interference with economic relations by unlawful means. Tortious interference is a term more commonly used in American law but is widely understood. The elements and the analysis are the same regardless of which term is used.
Does the defendant's conduct have to be criminal for this tort to apply?
No. Unlawful means includes conduct that is independently unlawful in a civil sense: a breach of contract, a breach of statute, a fraud, or another recognized tort. The conduct does not need to be criminal, though criminal conduct can also satisfy the unlawful means requirement.
A competitor is spreading false information about our business. Do we have a claim?
Possibly several. Defamation, injurious falsehood, and unlawful interference with economic relations may all be available depending on what was said, to whom, and with what intention. These claims are often pleaded together. The facts matter considerably, and an early legal assessment will clarify which causes of action are strongest on your specific situation.
What is inducing breach of contract and how is it different from unlawful interference?
Inducing breach of contract is a separate but related tort. It applies where a defendant knowingly and intentionally causes a third party to break a contract with the plaintiff. Unlike unlawful interference with economic relations, the defendant's means do not need to be independently unlawful. However, the plaintiff must show the defendant knew of the contract and intended to cause its breach. The two torts frequently arise from the same facts and are often pleaded together.
Can aggressive competition give rise to a tortious interference claim?
No, not on its own. Legitimate competition, even aggressive competition that wins customers away from a rival, does not attract liability. The tort requires that the defendant's means were independently unlawful. A competitor who competes hard but lawfully is not liable, even if the effect on the plaintiff is significant. This is also a key element of any defence to such a claim.
How long do I have to bring a claim for unlawful interference with economic relations?
In both Ontario and BC, the basic limitation period is two years from the date the claim was discovered or ought to have been discovered. In some cases, interference is subtle and discovery is delayed, which affects when the clock starts. Acting promptly once you become aware of the conduct is important both for the limitation period and for preserving evidence.
We have been served with a claim alleging tortious interference. What should we do?
Do not ignore it. Review the allegations carefully, preserve all potentially relevant documents and communications, and get legal advice before responding. These claims are technically demanding and many do not survive scrutiny, but the defence needs to be built on a clear understanding of what the plaintiff must actually prove. Deadlines apply once you are served.
Speak With a Lawyer About Unlawful Interference with Economic Relations
Tell us about your situation. We will follow up promptly to discuss your options. You can also reach us directly at 1-800-771-7882.