TORT 2.8 ECONOMIC TORTS
TOPIC EIGHT: ECONOMIC TORT.
Tort law has developed over the years in a bid to live up to its aim. The aim of tort law includes: (amongst others) the protection of the individual and his property through the tort of Trespass. The apportionment of blame and the central aim of encouraging man to live in an accommodating manner. To this end, the law of tort has evolved from judicial activism and statutory intervention.It went from trespass (to person and chattel) and securing the return of goods trespassed with by the writ of detinue… then went over to defamation to protect the reputation of an individual. Then to the tort of conversion and slander of title. Then to the tort of injurious falsehood where a false statement is made with malice in relation to the plaintiff.
Tort developed the liability for negligent misstatements which is evident in the case of Hedley Byrne V Heller and Partners Co. Then in the economic area, tort went over to the tort of passing off and deceit to provide damages for negligent or fraudulent misrepresentation (See Derry V Peek) and to prevent consumer confusion.
Then over to the tort termed; interference with contract as developed in Lumley V Guy, In this case, the plaintiff had employed a lady to sing at the theatre, she was enticed away by a third party. The court held that he caused damage to the plaintiff.
Then came the tort of conspiracy. It is a tort committed where a combination of two or more people maliciously set out to carry out an unlawful intention so as to inflict damage on the plaintiff. See Allen V Flood. In Quinn V Leatham, the defendants (members of a trade union) sought to make sure that the plaintiff (a butler) was dismissed because he had a quarrel with them. When they failed, they tried to induce the plaintiff’s customers not to deal with him. The court found conspiracy.
Then to the tort of intimidation. Which is any threat to do something unlawful if one’s demands are not met. For example A telling B to slap C or else he would set his dog on B.
Then to the tort of passing off which seeks to ensure that a man should not sell his goods on the pretence that they are goods of another-Perry V Truefitt; John Walker V Henry; Ost Vine Products V Mackenzie. This tort aims at protecting the goodwill of a business and preventing another from spoiling it- Passing off may come in form of: imitating/copying the plaintiff’s trade mark; OR imitating the appearance of the plaintiff’s goods; OR imitating the plaintiff’s business address/place (Day V Brownrigg)
In Reckitt and Colman V Borden, the court granted an injunction to prevent the defendants from selling their lemon juice in a container similar to that which the plaintiff had been selling theirs. See also Bollinger V Costa Brava Wine Co, Bradford Corporation V Pickles; Parker-Knoll V Parker-Knoll International Ltd; in this case both companies were manufacturers of Furniture one based in UK and the other America which just began trading in UK. An injunction was granted to stop further trading of the second one as the names were too similar to deceive. See also Tussaud V Tussaud; Niger Chemist V Nigerian Chemist; the court held that the defendants would greatly confuse the public if they continue to trade in a name (Nigerian Chemist) so similar to the plaintiff’s (Niger Chemists Ltd).
Although in practice, the court may require the plaintiff to prove that him and the defendant are in the same/common field of activity. E.g. Mayville Private Secondary School and Mayville Hotels are in different fields, so if Mayville Hotels should sue, they may not be successful. See Exxon Mobil V Exxon Consultants, McCulloch V Lewis A May ltd, the action of passing of failed because the plaintiff was in the trade of Broadcasting while the defendant was in the trade of selling Cereal and although the names were similar, the court held that there is no disturbance or destruction of the plaintiff’s business/goodwill so there should be appropriately no claim for passing off.
See British Vacuum Cleaner V New Vacuum Cleaner for descriptive words.
Remedies include injunction, damages and account for profits.
The law then went over to the tort of DECEIT.
In Pasley V Freeman, it was held that a person who makes a false statement or representation intended to be acted upon must pay for the damage naturally resulting from its being acted upon. The elements of deceit include:
- The defendant must have made a false representation: The representation need not be express. Legh V In R V Barnard, the defendant wore the robe of an Oxford student and obtained credit for food. It was held that he falsely represented by conduct. Note the following for false representation:
- There is a statutory duty to disclose except; Partial disclosure has already been made. Then you fully disclose.
- The defendant should not actively conceal a fact
- Where the defendant discover that a previous statement he thought was true is now false. He is under an obligation to disclose.
- The defendant was aware of its falsity: this is the second element of the tort of deceit In Derry V Peek, the company invited investors assuring that their tramway would run on mechanical power. They honestly thought that the board would approve their request. They did not get the approval It was held that the defendants honestly believed in the truth of the statement.
- Intended that the statement be acted upon by the plaintiff: Langridge V Levy, the court held the seller liable where he represented his gun to be good and the plaintiff bought it. It burst and injured the plaintiff when he fired it. See also Peek V
- The plaintiff acted in reliance to the statement (i.e. relied on the misrepresentation) and sustained damage: Edgington V Central Railway of Venezuela V Kisch, the court held that claimants who had relied on a false statement in a company’s prospectus were entitled to claim damages. Such liability for deceit subsists and cannot be negated by agreement-S Pearson and Sons Ltd V Dublin Corporation. In the English case of A V B (2007) a defendant successfully sued his former girlfriend (for E22,000 damages) who had falsely claimed that he was the father of her son
The law then introduced the tort of INJURIOUS FALSEHOOD.
This is similar to but unlike defamation. Here the element of injury to reputation in the minds of right thinking members of a society is lacking. This tort focuses on economic engagements. The Younger Committee on Privacy pointed; the malicious publication in a newspaper that a famous pop singer has joined the monastery would certainly not lower him in the esteem of right thinking members of the society but he could lose engagements and therefore, money.
The elements of this tort include:
- The defendant made a false representation: In Ratcliffe V Evans, the court held that there was injurious falsehood where a publication stated that the plaintiff has ceased to trade which was not the case. In Shepherd V Wakeman, the false statement that the plaintiff was already married when she was not. She lost suitors.
- The representation was made with malice: if the defendant knows that the statement is false. Meaning the absence of just cause or excuse.
- The statement was communicated to a person other than the plaintiff.
- The plaintiff suffers damage: in Barrett V Associated Newspapers, the court held that there is not damage where the defendant stated that the plaintiff’s house was haunted by a ghost. There may have been damage if it was a commercial enterprise and the assertion reduced the flow of customers.
In conclusion, the law of tort has been evolving and shall continue to evolve to meet the dynamic society we live in.
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