Amalgamated Society of Railway Servants v Osborne (1909)

In a jurisprudence paper you meet this case under Hohfeld. A Member of Parliament has a liberty (privilege) to vote as his own judgment directs. Can he turn that liberty into a duty owed to someone else by contract — promising, for pay, to vote as a party instructs? Lord Shaw said the law will not recognise such a contract: it is void as contrary to public policy. So the case shows that the law sometimes refuses to let a person convert a liberty into an enforceable duty.

Be precise about what the House actually decided. The majority decided on ultra vires grounds — the trade union had no power to levy members for political purposes. Only Lord Shaw decided on public policy, and he said himself that he stood alone and that his view would not form part of the ratio of the House.

Osborne had been a member of the Amalgamated Society of Railway Servants, a registered trade union, since 1892. On 1 October 1906 the union altered its rules. It added the object of securing parliamentary representation, imposed a compulsory levy on members for that purpose, and added to Rule XIII: "All candidates shall sign and accept the conditions of the Labour Party and be subject to their Whip." A new clause provided for candidates "responsible to and paid by this society".

Under the Labour Party's constitution, candidates and members had to accept the constitution and agree to abide by the decisions of the Parliamentary party.

Osborne sued for a declaration that the levies were illegal and unenforceable, and an injunction. Eve J found against him; the Court of Appeal (Cozens-Hardy MR, Moulton and Farwell LJJ) reversed. The union appealed.

1. Was a compulsory levy to fund parliamentary representation within the powers of a trade union under the Trade Union Acts 1871 and 1876?
2. Were the rules binding candidates to the Labour Party's conditions and Whip void as contrary to public policy?

The appeal was dismissed; the rules imposing the levy were invalid and unenforceable.

The majority: ultra vires

• Earl of Halsbury: the statute is a kind of charter, and what is outside it is prohibited; "this levy is to my mind manifestly beyond the powers possessed by a trade union." He expressly declined to go further than necessary.
• Lord Macnaghten: bodies owing their status to an Act of Parliament cannot apply their funds to purposes foreign to those for which they were established. "It can hardly be contended that a political organisation is not a thing very different from a combination for trade purposes." Such a rule "must be ultra vires and illegal". He thought it unnecessary, and doubted whether it was expedient, to discuss the constitutional question.
• Lord James of Hereford rested on one fact: the Whip condition. He read it as meaning "that the member undertakes to forego his own judgment", and so held that paying a member whose action is so regulated "is not within the power of a trade union." He left the broad constitutional question open.
• Lord Atkinson also decided on the first question and expressly abstained from the second.

Lord Shaw: void as contrary to public policy

Lord Shaw did not dissent on the ultra vires point, but said: "I do not dissent, but I do not decide." He decided on the second ground, while acknowledging: "As, however, I stand alone in this course, and as accordingly my view would not be considered as entering into the ratio of the judgment of your Lordships' House as a whole, I shall content myself with a brief statement."

His reasoning is the part you need for Hohfeld:

• A member bound by these conditions "has come under a contract to place his vote and action into subjection not to his own convictions but to their decisions."
• "I do not think that such a subjection is compatible either with the spirit of our Parliamentary constitution or with that independence and freedom which have hitherto been held to lie at the basis of representative government in the United Kingdom."
• The member would still enter Parliament "a free man, because the law would treat as non-enforceable and void the contract which purported to bind him". But when the law is asked to enforce such a contract, "the law will decline such recognition or enforcement, because the contract appealed to is contrary to sound public policy."
• The member "is not to be the paid mandatory of any man or organisation of men, nor is he entitled to bind himself to subordinate his opinions on public questions to others, for wages, or at the peril of pecuniary loss".
• He was careful to add that "nothing that has been said attaches a taint or shadow of illegality to the payment of members of Parliament" — the vice lies in the conditions of subjection, not in payment as such.

Of the House: a registered trade union, whose objects and powers are defined by the Trade Union Acts 1871 and 1876, has no power to levy its members to fund parliamentary representation; rules providing for such a levy are ultra vires and unenforceable.

Lord Shaw's separate ground (not part of the ratio, on his own statement): a contract by which a Member of Parliament binds himself, for payment or under financial penalty, to vote at the direction of others is contrary to public policy and will be neither enforced nor recognised by a court.

• Hohfeld's liberty and duty: Explain Hohfeld's jural correlatives and opposites with illustrations. Use Osborne for the point that a liberty may be protected by the law's refusal to enforce a contract turning it into a duty: the MP's liberty to vote freely survives because the contract binding him is void.
• Precision marks: say that the House decided on ultra vires, and that the public-policy reasoning is Lord Shaw's alone, as he himself said.
• Public policy and freedom of contract: use Lord Shaw's distinction — payment of members is lawful; a contract of subjection is not.
• Legal and political sovereignty / representation: Lord Shaw's view that a member "serveth for the whole realm" (quoting Coke) can support an answer on the independence of legislators.