• Use of word 'mutual' in a business' trading name in connection with the sale of financial services products
  • Claim of passing off on the basis that the business was not a mutual entity
  • Does 'mutual' indicate a distinct type of entity thus creating goodwill?

What's it about?

Military Mutual Ltd (MML) brought a claim of passing off against Police Mutual Assurance Society Ltd (PMAS), and its subsidiaries (Subsidiaries) in relation to the use of the word 'mutual' in the subsidiaries' trading name: 'Forces Mutual'. Although PMAS was a true 'mutual' in the sense that it is owned by its members, the Forces Mutual businesses did not allow their customers to become members and part owners and so is not a 'mutual' in the same sense.

MML argued that in the eyes of the public, the word 'mutual' represented a distinct type of business, which offered advantages to its customers. MML's view was that goodwill exists in the businesses of true 'mutual' financial services businesses; using the term 'mutual' amounted to a misrepresentation by the Subsidiaries which damaged the collective goodwill associated with it.

Why does it matter?

The IPEC dismissed the claim. It held that the evidence did not support MML's claim that the term 'mutual' denoted a distinct type of financial organisation which was solely owned by at least some of its customers. In addition, the IPEC decided that there was no misrepresentation due to the fact that the Forces Mutual businesses were owned by PMAS, and therefore part of a mutual group. Finally, IPEC held that there was no evidence of damage to MML's business.

Now what?

This was possibly the first case in which a claimant argued passing off in relation to goodwill associated with a service. Although the claimant was unsuccessful in this case, the judge commented that he saw "no reason why the law of passing off should not similarly protect goodwill associated with the name of a type of service." This suggests that similar types of claims arguing passing off in relation to goodwill associated with a service may follow in the future.

Military Mutual Ltd v Police Mutual Assurance Society Ltd and others [2018] EWHC 1575 (IPEC)