The Osborne Judgement arose out of a case brought, in 1908, by Mr W.V. Osborne, secretary of the Walthamstow Branch of the Amalgamated Society of Railway Servants (ASRS), who claimed that it was illegal for the ASRS to impose a 'political' levy on its members for the support of its sponsored candidates who were elected to Parliament. Osborne initially lost his action; but Mr. Justice Neville's decision was later reversed by the Court of Appeal, and the House of Lords in due course confirmed that reversal, on the grounds that no provision for political activities or the political use of trade unions fund had been made in the Trade Union Act of 1876. Therefore, declared Lord Halsbury, 'what is not within the ambit of that Statute is, I think, prohibited both to a corporation and a combination.'
At this, a huge majority of delegates to the 1910 Trades Union Congress were up in arms, demanding that legislation to reverse the situation created by the Osborne Judgement should be introduced immediately, so that trade unions should be legally entitled to spend their own funds in whatever way they wished.
But the reversal process took some time. The situation was not, in fact, put right until 1913 - and then only partially; because the Trade Union Act of that year placed a number of restrictions on a trade union's right to contribute the proceeds of its political levy to the party, or candidate, or MP of its choice. Meanwhile Labour MPs who, unlike Conservative and Liberal Members, had no private means, were enabled just to subsist by virtue of the new State payments to Members of the House of Commons, which had been introduced by Lloyd George.