It held that, at common law, unions could be liable for loss of profits to employers that were caused by taking strike action.

[1] A trade union, called the Amalgamated Society of Railway Servants, went on strike to protest against the company's 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 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 and the workers returned to work.

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.

Subject to such control as an annual general meeting can exercise, the government of the society is in the hands of its executive committee, a small body with vast powers, including an unlimited power of disposition over the funds of the union, except so far as it may be interfered with by the annual general meeting, or restricted by the operation of the society's rules, of which, in case of doubt, the executive committee is the sole authorized interpreter.

At first sight that seems a strong point, but the truth is that all the moneys of the society, for whatever purpose they may be collected, form a common fund.

"At present," say the authors of that statement, "the strength of the union, and the confidence of its members, simply consists in this, that it can, if so disposed, employ the whole of its funds in the support of the trade ends.

"[4] An enforced separation of the funds of the union would be, they say, "arbitrary interference with the liberty of association" - it would "paralyze the efficiency of the institution."

It is perhaps satisfactory to find that nothing of the sort was contemplated by the minority of the members of the Royal Commission on Trade Unions, whose views found acceptance with the Legislature.

Then he was asked, what would he say to such a case as this: Suppose there were a manufactory belonging to a co-operative society, unregistered, and composed of a great number of persons (as there well might be, but for the provision in the Companies Act making illegal an unregistered trading society consisting of more than twenty members), and suppose such a manufactory were poisoning a stream or fouling the atmosphere to the injury of its neighbours, might it do so with impunity?

It is true, as repeatedly stated both by Farwell J. and by the Master of the Rolls, that by neither of the statutes are trade unions, although registered, declared to be incorporations, which would as a consequence give them a right to sue and render them liable to be sued in the society's name.

It is equally true, as the Master of the Rolls observes, that the right to sue and liability to be sued may be conferred by statute either expressly or by implication.

A registered trade union has an exclusive right to the name in which it is registered, a right to hold a limited amount of real estate and unlimited personal estate for its own use and benefit and the benefit of its members, the power of acting by its agents and trustees, and is liable to be sued for penalties, as it appears to me, in the society's name.

My Lords, I shall trouble your Lordships with but a few words, for I entirely concur in the judgment and words of the Lord Chancellor in adopting the judgment of Farwell J. I do not think this House is called upon to do more to-day than determine whether a primâ facie case has been disclosed by the Taff Vale Railway Company entitling them to the injunction they claimed, and whether the trade union society can be sued for such an injunction in its registered name.

I find on page 91 of the Appendix that rule 7 (3) provides that the funds of every branch shall be the common property of the society.

But the rules as to parties to suits in equity were not the same as those which governed courts of common law, and were long since adapted to meet the difficulties presented by a multiplicity of persons interested in the subject-matter of litigation.

This was done avowedly to prevent a failure of justice: see Meux v Maltby[7] and the observations of Sir George Jessel MR[8] The principle on which the rule is based forbids its restriction to cases for which an exact precedent can be found in the reports.

The rule itself has been embodied and made applicable to the various Divisions of the High Court by the Judicature Act 1873, ss.

16 and 23-25, and Order XVI., r. 9; and the unfortunate observations made on that rule in Temperton v Russell[9] have been happily corrected in this House in the Duke of Bedford v Ellis[10] and in the course of the argument in the present case.

For such violation the property of trade unions can unquestionably in my opinion be reached by legal proceedings properly framed.

12 provides summary remedies for misapplications of the trade union's property, but there is nothing here to oust the jurisdiction of the superior Courts, and, there being nothing in the Act to prevent it, I cannot conceive why an action in the name of the trade union, against its trustees to restrain a breach of trust or to make them account for a breach of trust already committed should be held unmaintainable or wrong in point of form.

The Act appears to me to indicate with sufficient clearness that the registered name is one which may be used to denote the union as an unincorporated society in legal proceedings as well as for business and other purposes.

I am of opinion that the orders of Farwell J were right and should be restored.Balfour's Conservative government later set up a royal commission, a decision that was unpopular among trade unionists.

[11] 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.