Case No. IP-2016-000182

on the meaning of a financial ‘mutual’ 114.In my view the evidence as a whole showed that in April 2016 most of the relevant public had some notion of what a mutual is, though not the same notion in every case. The term conveyed something positive to them. It is likely that some believed that a mutual has no shareholders, though it is hard to say what proportion.115.The evidence did not support a belief that financial mutuals are invariably owned by some or all of their customers. Indeed, that is not always the case. It did not support the suggestion that the relevant public have two distinct understandings of the term ‘mutual’. ‘Mutual’ was given only the one broad meaning. If there were members of the armed forces who in April 2016 thought that financial mutuals are always owned by some or all of their customers, this would have been seen as nothing more than a general pattern thus far among mutuals. It would not have influenced their understanding of the term ‘mutual’.116.Moreover, to the extent that when used in the context of a financial organisation ‘mutual’ implied anything about its ownership, the understanding would have been hazy because it would not have mattered much to the relevant public. The consequence of the public understanding of ‘mutual’ 117.MML faced a dilemma in choosing its definition of financial ‘mutual’. The fact that there were several possibilities to choose from was already a difficulty. MML could not simply go for a financial organisation without shareholders because that would have covered Forces Mutual. The next most straightforward option would have been a financial organisation owned by all its customers. This would have been in close conformity with the dictionary definitions. But too many organisations calling themselves mutuals – and which MML’s witnesses acknowledged to be mutuals – fell outside that definition. These included Royal London which, as Mr Shaw confirmed, alone accounts for about 75% of the assets in the mutual insurance sector. It has 8.8 million policyholders, of whom only 1.2 million are members. At the trial MML chose as its class financial organisations solely owned and controlled by some or all of its customers.118.The evidence does not support MML’s claim to collective goodwill held by that class because the public did not in April 2016 recognise any such class as being distinct. The term ‘mutual’ had not acquired a narrow meaning used to define the ownership structure of that class. I do not accept that any significant part of the public held the belief that that in the context of financial organisations ‘mutual’ meant that it must be owned solely by all or some of its customers. 119.In my view the shared goodwill asserted by MML did not exist. The further arguments Whether Forces Mutual existed 120.Mr Silverleaf submitted that Forces Mutual was nothing more than a brand name and therefore could not be a mutual. I find this hard to follow. Forces Mutual is a trading name used by several companies. It is not a name in the ether unattached to any trading entity. Whether MML could have shared in the goodwill 121.Forces Mutual argued that by April 2016 MML had not traded sufficiently to acquire a share in the goodwill, had it existed. I disagree. For the reasons discussed above, I think that any relevant trading above a de minimis level would have been sufficient. Even if the bar were set higher, there was evidence that between April 2015 and April 2016 MML had advertised its services on a significant scale.122.There was also an argument from Mr Malynicz that MML could not share in any goodwill because it did not subscribe to the true mutual ethos. He said that MML is in practice run by Regis and its true pattern of trading was not made clear to its members. I take this to be based on the proposition that irrespective of what the public may think, MML is not a ‘genuine’ mutual.123.Mr Koronka was rigorously cross-examined on this topic which formed a significant part of Forces Mutual’s argument in closing. I do not have the information to decide whether or not the trading relationship between MML and Regis is as it should be. This is a matter of financial regulation which would have to be explored more deeply than was possible or appropriate at this trial. It was not in any event established that MML’s relationship with Regis deprived it of its status as a mutual and therefore a share in the goodwill, had there been any. Whether there could have been a misrepresentation 124.Forces Mutual submitted that they were part of a group which offered qualifying products to some customers, allowing them to become part owners of PMAS. On MML’s definition they qualified as a mutual. On any view, therefore, there could be no misrepresentation.125.It seems to me realistic to treat Forces Mutual as part and parcel of the group owned and controlled by PMAS with Forces Mutual providing an outlet for some of the group’s products. Mr Silverleaf did not argue to the contrary. It was not in dispute that PMAS is a friendly society complying with the 1992 Act, or that it is therefore a mutual. It was common ground that the 1992 Act permitted PMAS to conduct part of its business through subsidiaries without losing its friendly society status. It was also common ground that a mutual need not offer qualifying products to all its customers. Even on MML’s narrow definition Forces Mutual are part of a mutual group and, in my view, are thus mutuals. There could never have been a misrepresentation.126.In opening Mr Silverleaf made a submission which I think recognised the problem with this part of MML’s case. He said that an entity cannot be a genuine mutual if it offers ownership to some customers but discriminates between customers on grounds of employment, specifically offering qualifying products to the armed forces but not to the police force. This was not pursued in closing, formed no part of the final definition of a ‘mutual’ advanced on behalf of MML and had no evidential basis. Whether there could have been damage 127.Mr Malynicz argued that even if MML’s goodwill existed and there had been a misrepresentation and confusion arising from Forces Mutual styling itself a mutual, there would have been no damage. It had been shown that there were companies trading in April 2016 which were recognised as financial mutuals but were not owned by their customers. Therefore, the argument continued, the addition of other similar entities, Forces Mutual, could not have damaged the goodwill.128.Mr Silverleaf did not point to any evidence of MML losing sales due to Forces Mutual using a name including ‘mutual’. That left dilution of goodwill. The burden of proving dilution would not have been heavy had there been goodwill and a misrepresentation. On the present facts there is substance to Mr Malynicz’s argument, but the lack of damage is closely related to the lack of goodwill. Conclusion 129.MML’s claim against Forces Mutual for passing off is dismissed.