Civil Conspiracy

Running a small business takes a lot time and energy, so when someone acts in a way that negatively affects your business, it can be very frustrating. Although not all actions that negatively impact your business are unlawful acts, you may have recourse under civil law if a tort was committed against you. Business torts, also referred to as economic torts, are civil wrongs (called "torts" in the legal field) that arise from business transactions and relationships resulting in economic loss. Examples of business torts include negligent misrepresentation, inducement of breach of contract, and civil conspiracy. Most states do not consider civil conspiracy to be a separate action, meaning that there must be an underlying tort in order to bring a civil conspiracy claim.

Criminal Conspiracy vs. Civil Conspiracy

A conspiracy occurs when two or more people plot to commit an unlawful act. In some cases, a conspiracy can also occur when an act is not illegal, per se, but becomes unlawful when committed by a group of people. The main difference between a civil conspiracy and a criminal conspiracy is that in a criminal conspiracy, the actors are intending to commit an act that is punishable under criminal laws. A civil conspiracy can occur when two or more people conspire to commit an act that is not criminal, but still unlawful, and another person is injured by the act.

Proving a Civil Conspiracy

In order for a person to succeed in a civil conspiracy case, he or she must prove the elements. According to the Restatement (Third) of Torts: Liability for Economic Harm § 27, the elements of a civil conspiracy are as follows:

1. The defendant made an agreement with another to commit a wrong;
2. a tortious or unlawful act was committed against the plaintiff in furtherance of the agreement; and;
3.  the plaintiff suffered economic loss as a result.

Since civil conspiracy requires an unlawful act, the plaintiff must show that a tortious act was committed. A few examples of torts in the context of business are unfair competition and wrongful interference with a business contract or relationship. If the acts were lawful under tort law, the claim for civil conspiracy would fail. In addition, if the claim for the underlying tort claim fails, the civil conspiracy will also fail.

The plaintiff must also prove that the conspirators had an intention to commit an unlawful or tortious act. If the actors had no knowledge of the wrongful nature of the act and no intention to cause harm when they made the agreement to take the particular course of action, the civil conspiracy claim would fail.

It's important to also realize that if a person was present at the time of the tortious act, but not in agreement with the other actors, he or she will not be held liable for a civil conspiracy. In addition, while an officer can be a party to a civil conspiracy, a corporation cannot. If a civil conspiracy is found to have been committed, each conspirator will be held jointly and separately liable for the actions of each conspirator. The only way to avoid liability for subsequent acts related to the conspiracy is to withdraw from the agreement and the other conspirators must be informed of the withdrawal.

Getting Legal Help

If you believe that a civil conspiracy has been committed against your business that resulted in damages to your business, it may be a good idea to contact a local business and commercial law attorney to discuss your options.

You can visit FindLaw's section on Business Torts to find more information and resources related to this topic.