In 1901 the Taff Vale Railway Company sued the Amalgamated Society of Railway Servants for losses during a strike. As a result of the case the union was fined £23,000. Up until this time it was assumed that unions could not be sued for acts carried out by their members. This court ruling exposed trade unions to being sued every time it was involved in an industrial dispute. After the 1906 General Election the Liberal Government passed the 1906 Trades Disputes Act which removed trade union liability for damage by strike action.
Early in 1901 the Taff Vale Railway Company sued the Railwaymen's Union for fantastic damages because of the action of Union men in a trade dispute. After a case, which was conducted on lines which amazed every Labour man in the country, the House of Lords gave a final decision against the Union, which was mulcted of "3,000 damages, and incurred expenses amounting to a further £19,000. Other capitalists were not slow to realize the significance of this judgment! Trade Unions were sued on the most absurd grounds; the Taff Vale decision was quoted as a precedent; and Labour lost action after action.