Glen Chapple finished with five for nine and Kyle Hogg ended with four for 11 after they produced a breathtaking spell of new-ball bowling.
The visitors had gained a first-innings lead after being bowled out for 398, with the last three wickets adding 190 runs, including half-centuries for Hogg and Chapple, before the pair made it a day to remember for both themselves and their team.
They immediately found their rhythm, line and length and had the home side in deep trouble from the start as seven wickets fell in the first 50 deliveries as a series of Essex batsmen came and went in quick fashion.
Hogg burst through the top order with four of the first five wickets to enjoy figures of four for three at that point as the first three wickets fell with the total on five.
Tom Westley got off the mark with a boundary, but then chipped to cover before New Zealand test batsman Hamish Rutherford drove Hogg to Chapple at mid-off to record the first of six ducks in the home side’s woeful innings.
Owais Shah and Ben Foakes were pinned in front of their stumps by Hogg either side of the downfall of Ryan ten Doeschate, which gave Chapple his first wicket. With the scoreboard showing 15 for five, James Foster was run out for four by Chapple in his follow through when opener Jaik Mickleburgh called for a suicidal run.
It took Chapple little time to polish off the innings.
Graham Napier was leg before, Sajid Mahmood was bowled and then Mickleburgh, who had watched the carnage for just over an hour and faced 38 balls, walked across the line and was lbw for ten, which was to represent half the total.
Reece Topley was pinned in front of his stumps to Chapple’s next delivery and that concluded an innings that had lasted just 68 minutes.
Lancashire took 23 points from the match and Essex five.
Essex’s previous lowest total in first-class cricket was 30 against Yorkshire at Leyton in 1901.
It was the first time that Lancashire had dismissed opposition for less than 22 and that occurred against Glamorgan at Liverpool in 1924.
Worst innings in the County Championship
12 Northamptonshire v Gloucestershire: (Gloucester 1907)
13 Nottinghamshire v Yorkshire (Trent Bridge 1901)
14 Surrey v Essex (Chelmsford 1983)
15 Hampshire v Warwickshire (Edgbaston, 1922)
16 Warwickshire v Kent (Tonbridge 1913)
20 Sussex v Yorkshire (Hull 1922)
20 Derbyshire v Yorkshire (Bramall Lane, 1939)
20 Essex v Lancashire (Chelmsford 2013)