Can You Seek Damages if You Lose Business Based on an Opponent’s Conduct During Litigation?

Ordinarily, if someone acts in bad faith, or with malice, and interferes with a contract causing lost profits, a party can potentially bring a claim in court for tortious interference with contractual relations. However, the claim is likely unavailable if the basis for the claim arises from a pending litigation case. For example, assume you have a valuable business contract, and the contract gets cancelled because of something an opponent claimed during a litigation proceeding?  A recent appellate court case case confirms that immunity applies to bar claims of interference with contractual relations when the actionable conduct arises out of a litigation case.  Litigation can be very disruptive to ongoing business relationships.  There could be situations where a party in a litigation case loses business because of something someone does or says during a proceeding in litigation, such as a court hearing.  Unfortunately, some litigants might do this intentionally as a way to gain advantage in a case.   In contrast, some other litigants might seek to raise a claim of interference or infliction of emotional distress even if the conduct in question was fair game in the course of the case.  The courts in Connecticut essentially come down on the side of barring subsequent claims of this type that are based on conduct during a litigation proceeding.  The reason is policy based, in part, because the courts do not want witnesses and litigants to fear reprisals for raising legitimate facts and arguments in court. Essentially, although there is a risk of litigants unfairly seeking to harm an opponent through deliberate efforts, the risk is outweighed by the importance of candor and truth seeking in court proceedings. There are other ways to address improper, baseless or unethical conduct by opponents during a litigation proceeding.  However, if an opponent resorts to filing a separate lawsuit for interfering with a business relationship or for infliction of emotion distress, the case likely will be opposed by a motion to dismiss based on immunity.