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Sender:
Eoin O' Dell
Date:
Mon, 1 Feb 1999 15:37:23
Re:
Clamato

 

Steven Elliott asks:

I wonder if anyone can help me with the Cadbury Schweppes decision.

My view is that since FBI could and would have developed a competing product before the 1983 end of the licence period, its wrong did not cause CS any loss.

Does this view fail to distinguish between the wrong and the injury ? In tort, a builder might have been negligent this day last year but the building might not have fallen down on top of me until today. The wrong occurred last year, the injury occurred today, and last year's wrong caused today's injury (in the sense that but for the builder's negligence, the house would not have fallen down).

Similarly, if, as seems correct, the breach of confidence consisted in the misuse of the information, the wrong occurred when the information was misused, that is to say, a year before marketing of the competing product began. However, it was not until the marketing began a year later that the injury occurred. The wrong - the breach of confidence - occurred last year, the injury occurred a year later, and last year's wrong caused today's injury (in the sense that but for the breach of confidence, the *particular competing* product which was developed would not have been developed).

Notwithstanding the parentheses, I think that there is something in the causation point:

If FBI had not used the secret recipe it would nonetheless have been able to produce an equivalent product in the same time and also before the expiry of the licence in 1983, and would have done so.

It questions whether there is in fact any loss the following year because the same outcome could have been reached in a non-wrongful way. But even if the builder could have built an unsafe house without being negligent, it doesn't change the fact that he was negligent in this case and that his negligence caused my injury. As I understand the common law (and of course it is only a partial understanding subject to correction) the proper comparison is simply the state of facts without the relevant wrong; there is no warrant to substitute non-negligent action leading to the same outcome; and without the negligence, the house should not have been unsafe. Similarly, even if a manufacturer can make a drug with unfortunate side-effects without being negligent doesn't diminish its responsibility if it is negligent in its manufacture of a batch which causes the same side effects. On the facts without the negligence, and without substituting non-negligent action leading to the same outcome, the drug should not have had the side effect.

Likewise here just because FBI could have reached the same result without breaching confidence doesn't alter the fact that they did breach confidence and that the breach of confidence resulted in losses on the facts. On the facts without the relevant wrong, and without substituting the non-breaching development of a similar (or even exactly the same) competing product, the situation would simply have been the marketing of Clamato without a competitor.

[I said that it was my belief that the common law simply compared with the actual outcome the situation which would have obtained without the relevant wrong. This examination of what the state of facts would have been without the relevant wrong is characterised, by German law, as the elimination method of testing causation. However, German law goes further and proposes also a substitution test of causation. If I am wrong, and the common law too applies a substitution test, then we might learn from the German law as to when each is appropriate: it applies the elimination method to acts and the substitution method to omissions, substituting lawful action for omission and comparing the outcome with what had actually occurred (all of this is discussed in Markesinis _The German Law of Torts. A Comparative Introduction_). Steven Elliott's objections would apply substitution to acts, which even German law seems not to do.]

Finally, I have to pose the question which has puzzled me since I became familiar with the case: why would anyone want to drink Clamato (or a competitor) anyway ? :)

 

Eoin.

EOIN O'DELL
Barrister, Lecturer in Law

Trinity College
Dublin 2
Ireland

ph (+ 353- 1) or (01) 608 1178
fax (+ 353- 1) or (01) 677 0449
mobile/cellular (+ 353-86) or (086) 286 0739

Live Long and Prosper !!
(All opinions are personal; no legal responsibility whatsoever is accepted.)


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" These messages are all © their authors. Nothing in them constitutes legal advice, to anyone, on any topic, least of all Restitution. Be warned that very few propositions in Restitution command universal agreement, and certainly not this one. Have a nice day! "


     
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