Word to the wise: court dismisses claim for personal liability of in-house counsel

The High Court has dismissed an application to join a General Counsel (GC) as a party to a passing off claim. The case offers some comfort to in-house lawyers that, when advising their employer and offering them legal support in relation to a rebrand, they are very unlikely to be held liable for any resulting infringement of a third party’s rights. However, the decision also points to when in-house lawyers might cross the line into personal liability.

Background

In February 2021, TransferWise Limited, an e-payment provider, underwent a rebrand, in the course of which it changed its corporate name to Wise Payments Limited (WPL) and adopted the brand “Wise”. Then, in 2023, WPL issued a claim for trade mark infringement and passing off against With Wise Limited (WWL), a logistics software company, on the basis that WWL was using the brand "Wise".

WWL counterclaimed that its use of “Wise” preceded that of WPL and therefore WPL was liable in passing off to WWL. In pursuing this counterclaim, WWL applied to the court to join several additional parties to the proceedings. One of these parties was Dean Nash (DN). DN had been the GC and Company Secretary of WPL between October 2020 and December 2021. DN had also been a director of WPL between September 2021 and December 2021. So, DN was the GC of WPL at the time of the rebrand, as well as company secretary, but was not a director until after the rebrand had occurred. DN left WPL in January 2022.  

Allegations against DN

We previously explored the principles on which Company Directors can be held liable for infringements here.

In this new case, WWL claimed that DN was responsible for WPL’s decision to rebrand to “Wise” in February 2021 and was therefore jointly liable in passing off on the basis that DN had authorised and / or procured and / or participated in a “common design” with WPL to commit passing off.  

As evidence, WWL relied on the following: a press release from DN’s new employer that explained that he had helped WPL to re-brand; an article in the legal press saying that DN had led the rebrand; and a comment by DN on his LinkedIn page that he had helped WPL rebrand, rename and reconstitute as WPL.

Decision

In refusing to join DN to the proceedings the court largely agreed with the arguments made by DN’s Counsel.

The judge said that the mere fact that DN held the positions of GC and Company Secretary at the time of the rebrand could not amount to a basis for finding DN jointly liable for passing off. The evidence relied on by WWL from the press and social media pages did not take WWL’s case any further forward in this respect. The judge accepted that this was evidence only that DN facilitated the rebrand which, in line with a Supreme Court ruling in an earlier case, was not enough. The judge accepted DN’s evidence that he provided necessary legal support to WPL but that there was no evidence to say that he formulated the policy to rebrand or drove it.

Takeaways

In-house lawyers can take a great deal of comfort from this judgment that liability will not be visited on them personally when they carry out their ordinary function of facilitating decisions of the company.

Nevertheless, there is a degree of caution to be exercised as in-house counsel might still be in difficulty where there is evidence that they gone beyond this and have taken on a directive role in the decision-making.

You can read the judgment in full here.

With many thanks to trainee Tom Chapman for his help in writing this article.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2024