Decision

Decision on Lloyds Warranty Limited

Published 3 October 2022

Companies Act 2006

In the matter of application No. 3556 by Lloyd’s, a body incorporated by the Lloyd’s Act 1871 for a change to the company name of Lloyds Warranty Limited, a company incorporated under number 13379291

Background and pleadings

1. The company name Lloyds Warranty Limited (“the primary respondent”) has been registered since incorporation on 6 May 2021 under number 13379291.

2. By an application filed on 2 July 2021, Lloyd’s, a body incorporated by the Lloyd’s Act 1871 (“the applicant”) applied under section 69(1) of the Companies Act 2006 (“the Act”) for the primary respondent’s name to be changed.

3. The applicant asserts rights in the name “Lloyd’s” and claims to enjoy an extensive reputation and goodwill under the name. The applicant owns many registered trade mark rights in respect of the mark “LLOYD’S” dating back as far as 1995 and has used this sign since 1871. It operates in the insurance market where members join together as syndicates to insure risk and it asserts that it is well known.

4. The applicant observes that the primary respondent’s name consists of the identical distinctive element “Lloyds” together with the non-distinctive elements “Warranty” and “Limited”. It asserts that the words “Warranty Limited” will be perceived as a reference to the nature of the respondent’s business and that little attention will be paid to this part of the name. The applicant further asserts that the primary respondent’s name is such as to cause confusion between the applicant and the respondent.

5. The primary respondent filed a notice of defence and counterstatement. It accepts the “position” of the applicant but:

• it asserts that the applicant’s act of incorporation does not grant exclusivity or any rights over the construction industry, or any other industry, other than the maritime industry;
  
• it states that it is a “provider of a product specifically targeting a warranty product for the construction and development industry”;
  
• it denies that its name is in anyway misleading or that it suggests a connection to the applicant;
  
• the applicant’s reputation is not adversely affected because the respondent is a warranty provider and the applicant is not;
  
• despite the applicant continuously been known by the name LLOYD’S and operating in the financial sector, this does not provide entitlement over the word “Lloyds”

6. It relies upon the following two defences:

• that its name was adopted in good faith, and;
• that the interests of the applicant are not adversely affected to any significant extent

7. At the request of the applicant, Nasser Saleh Alanizy was joined to the proceedings as co-respondent.

8. The parties both filed evidence. The parties were asked if they wanted a decision to be made following a hearing or from the papers. Neither side chose to be heard. The applicant was represented by Boult Wade Tennant LLP and the respondents represented themselves. I make this decision having carefully considered all the papers.

Evidence

9. The applicant’s evidence consists of the witness statement of William Timothy O’Connor together with Exhibits WOC1 to WOC10. Mr O’Connor is a solicitor and senior manager in charge of litigation and enforcement in the legal department of the applicant. Mr O’Connor provides the background and history of the applicant and evidence regarding the Lloyd’s market and other services offered under the Lloyd’s name.

10. The primary respondent’s evidence consists of the witness statement of Mr Alanizy, company director of the respondent company, together with Exhibits A to H2. Mr Alanizy provides evidence relating to the claim that the name was honestly adopted and a critique of the applicant’s evidence. He also challenges Mr O’Connor’s authorisation to make his statement and suggests his evidence should be “dismissed and declined”. Such a claim is without merit. Mr O’Connor is in a position with the applicant with responsibility for litigation and enforcement. As such, he is a suitable person to provide evidence on behalf of the applicant. Express authorisation is not required but can be inferred from his position in the organisation. I need say nothing further on this point.

11. The applicant provided evidence-in-reply to address the allegations made by the respondent regarding the accuracy of the applicant’s evidence-in-chief.

Decision

12. Section 69 of the Act states:

(1) A person (“the applicant”) may object to a company’s registered name on the ground—

(a) that it is the same as a name associated with the applicant in which he has goodwill, or

(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant

(2) The objection must be made by application to a company names adjudicator (see section 70)

(3) The company concerned shall be the primary respondent to the application. Any of its members or directors may be joined as respondents

(4) If the ground specified in subsection (1)(a) or (b) is established, it is for the respondents to show—

(a) that the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or

(b) that the company—

(i) is operating under the name, or

(ii) is proposing to do so and has incurred substantial start-up costs in preparation, or

(iii) was formerly operating under the name and is now dormant; or

(c) that the name was registered in the ordinary course of a company formation business and the company is available for sale to the applicant on the standard terms of that business; or

(d) that the name was adopted in good faith; or

(e) that the interests of the applicant are not adversely affected to any significant extent. If none of those is shown, the objection shall be upheld

(5) If the facts mentioned in subsection (4)(a), (b) or (c) are established, the objection shall nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name

(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed

(7) In this section “goodwill” includes reputation of any description

Goodwill/reputation

13. The relevant date for the purpose of proving goodwill/reputation is the date of the registration of the contested company name which, in this case, is the date of incorporation, 6 May 2021.

14. The concept of goodwill was explained in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 at 223:

What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.

15. Sections 69(1) and (7) stipulate that the applicant must have goodwill and/or a reputation in the name associated with it. The applicant, in its counterstatement, states:

We accept the position of Lloyds a body incorporated by the Lloyds act 1871, however in the act of incorporation nowhere does it grant exclusivity or any rights over construction or any other industry other than Maritime…

16. The primary respondent makes criticisms of the applicant’s evidence but in light of this statement, it appears to accept that the applicant has the requisite goodwill and reputation at least in respect of the maritime industry. The existence of a goodwill/reputation has subsequently been demonstrated in the applicant’s evidence, that I summarise very briefly below:

• the applicant operates “the most famous insurance market in the world and has an illustrious history spanning over 300 years”^{[footnote 1]} and it has a “prominent position in the insurance and reinsurance industry both in the UK and globally”; ^{[footnote 2]}
  
• Lloyd’s was legally formalised by incorporation under the Lloyd’s Act 1871 That Act focussed on marine insurance however there have been subsequent Acts brought in to force in 1911, 1951 and 1982 respectively. A copy of the 1982 Act is provided^{[footnote 3]} and this refers to insurance in general and encompasses all areas of insurance business^{[footnote 4]} such as accident and health, agriculture, engineering, extended warranty, general liability, property and terrorism;^{[footnote 5]}
  
• the applicant provides services to, protects and regulates an insurance and reinsurance marketplace under the name Lloyd’s and is referred to as the Lloyd’s market;^{[footnote 6]}
  
• every day, more than 50 leading insurance companies, over 200 registered brokers and a global network of over 4,000 local coverholders operate in and bring business to the Lloyd’s market.^{[footnote 7]} The applicant’s underwriting room in London sees more than £100 million in premiums and more than £49.9 million paid out in claims on any given day;^{[footnote 8]}
  
• the business written by the Lloyd’s market is not limited to marine policies but covers more than 60 lines of insurance and reinsurance;^{[footnote 9]}
  
• as reported in the applicant’s annual reports, total premiums for the five years 2016 to 2020 have been between £29.8 billion and £35.9 billion each year;^{[footnote 10]}
  
• extended warranty insurance accounted for £75.1 million of premiums in 2020 and reinsurance related to extended warranty accounted for a further £3.9 of premiums;^{[footnote 11]}

17. Taking all of the above into account, I conclude that the applicant’s long-standing business has the requisite goodwill/reputation as required by section 69(1)(a) and section 69(7).

Are the names “sufficiently similar”?

18. The primary respondent’s name must also be “sufficiently similar” to the name in which the applicant enjoys goodwill/reputation in the UK such that it would be likely to mislead by suggesting a connection between them. The name relied upon by the applicant is “LLOYD’S”. The differences between this name and the primary respondent’s name “Lloyds Warranty Limited” is the presence of the words “Warranty Limited” in the latter’s name.

19. Owing to the differences the names are not the same (section 69(1)(a)). However, the words “Warranty Limited” present in the primary respondent’s name indicate that the company provides warranty services and the word “Limited” is merely descriptive of the legal nature of the business. It is “Lloyds” that is the distinctive part of the primary respondent’s name. This differs from the name associated with the applicant only by the fact that it is presented in plural form whilst the applicant’s sign is presented in possessive form. Therefore, this part of the primary respondent’s name is aurally identical and visually different to the name relied upon by the applicant only to the extent that the applicant’s sign contains an apostrophe before the letter “s”. Such a minor difference may well go unnoticed and the primary respondent’s name is likely to be perceived as being the same as the applicant’s name. Taking all of this into account, I find that the names are sufficiently similar and that the use of the primary respondent’s name in the UK would be likely to mislead by suggesting a connection between it and the name relied upon by the applicant, under section 69(1)(b) of the Act.

Defences

20. As the ground specified in subsection 69(1)(b) is established, the onus switches to the primary respondent to establish its defences. It relies on two defences, namely, that (i) under section 69(4)(d) the contested company name was adopted in good faith, and (ii) that, under section 69(4)(e), the interests of the applicant are not adversely affected to any significant extent. I consider each, in turn, below.

The contested company name was adopted in good faith

21. It is evident from the wording of s.69(4) of the Act that the onus is on the respondents to show that the contested name was adopted in good faith. The relevant date for this defence is the date on which the company name was registered, namely, 6 May 2021.

22. The relevant evidence provided by the primary respondent can be summarised as follows:

• the primary respondent “is involved in the business of offering warranty services specifically for construction and development industry in the UK” and “is a warranty service provider”;^{[footnote 12]}
  
• a claim that the primary respondent has a very niche and specific customer base “which bears no overlap and/or resemblance with that of the Applicant’s (sic)”;^{[footnote 13]}
  
• Mr Alanizy has come up with a “unique idea of providing warrantees based solutions specific to the construction and development industry”;^{[footnote 14]}
  
• it is claimed that these solutions bear no connection, nor do they resemble the applicant’s business and associated services of marine insurance;^{[footnote 15]}
  
• Mr Alanizy is a Lloyds Registered Auditor;^{[footnote 16]} and he also refers to an organisation Lloyds Registered Quality Assurance or LRQA^{[footnote 17]}. He claims that “Lloyds is a historic coffee house and a stepping stone in the evolution of society to solve a major problem with uncertainty and risk there are several businesses and establishments with the name Lloyds including LRQA”.^{[footnote 18]} In his evidence, Mr O’Connor states that LRQA, like the applicant, was formed out of Edward Lloyd’s Coffee house and this is the reason both companies share the name.^{[footnote 19]} Mr Alanizy contends that this should not allow the applicant to benefit from the use by the LRQA and that a trade mark search shows that the name is available;^{[footnote 20]}
  
• he further states that it is his belief that the primary respondent’s name was honestly coined and adopted and that the applicant is attempting “to usurp the use of common word/mark Lloyds without having to submit any evidence of continuous use, widespread popularity and global reputation in the Warrantee Market”^{[footnote 21]}

23. The following principles in relation to good faith can be extracted from the judgments of the Privy Council in Barlow Clowes v Eurotrust International Ltd,^{[footnote 22]} and the Court of Appeal in England and Wales in Niru Battery Manufacturing v Milestone Trading Ltd^{[footnote 23]}:

(i) Good faith is not displayed by a failure to act in a commercially acceptable way or by certain kinds of sharp practice which fall short of outright dishonesty or by dishonesty itself – see Niru Battery at para 164

(ii) There is a combined subjective/objective approach to the honesty of a party’s behaviour. This involves (i) a consideration of what the party knew at the time of a transaction and (ii) how that party’s action would be viewed by applying normally acceptable standards of commercial behaviour – see Barlow Clowes paras 15–18, 28–32

24. The issue I must determine is whether the primary respondent was incorporated in good faith. My task is (a) to determine what the primary respondent knew at the time the contested name was adopted, and (b) whether the adoption of the name would be viewed as commercially acceptable behaviour when judged objectively. This means how reasonable people in the field would view the primary respondent’s behaviour (i.e. not simply how the respondent viewed their own actions).

What did the respondent know when it adopted the name?

25. A problem with the primary respondent’s defence is that it relies upon facts investigated for the purposes of these proceedings and does little to enlighten me as to what was known at the time the name was adopted. I consider it highly likely that the primary respondent was aware of the applicant. There is no evidence that, at the relevant date, it was the respondent’s opinion that the applicant was only involved with marine insurance. This appears to be a view gained from researching the Lloyd’s Act 1871 for the purposes of these proceedings. The applicant has subsequently shown that it is not restricted to marine insurance. It was the main focus at the time of the Lloyd’s Act 1871 but the Lloyd’s Act 1982 refers to insurance generally^{[footnote 24]} and the applicant provides information regarding the development and expansion of the Lloyd’s market beyond marine insurance.^{[footnote 25]} This is something that the respondents would have been aware of if due diligence was undertaken before choosing its name.

Whether the adoption of the name would be viewed as commercially acceptable behaviour

26. To choose a name, the distinctive element of which is virtually identical to a name used to identify the goodwill and reputation of a body very well known in the insurance industry is not commercially acceptable behaviour. If the primary respondent’s submission that the parties are in different fields was intended as a defence to this point, it fails for the same reasons explained in the previous paragraph.

27. Taking account of the repute of the applicant and its activities in the field of insurance together with the fact that the primary respondent is highly likely to have been aware of the applicant at the relevant date, I find that the name was not adopted in good faith. The defence that the primary respondent was in a distinct and different area of insurance is not persuasive because, even if this could have been a successful defence, there is nothing before me that suggests that this was in the thoughts of the respondents at the relevant date but rather it appears to be an argument constructed for the purpose of these proceedings. If due diligence had been undertaken at the time, it would have been obvious to the respondents that the applicant’s activities were not limited to marine insurance. I find that this defence is unsuccessful.

The interests of the applicant are not adversely affected to any significant extent

28. The primary respondent offers no specific reasons for relying upon this defence, however, it has submitted that it believes it is in a different field to the applicant because it specialises in warranties for the construction industry whilst (in its view), the applicant is only involved in maritime insurance. The applicant’s evidence sufficiently illustrates that its sphere of business goes well beyond maritime insurance, and it is my view that the primary respondent’s use of the word “Lloyds” in its name will lead to an assumption that it has some link to the applicant. This may adversely affect the applicant by drawing business away from it.

29. In summary, I find that this defence is unsuccessful.

Outcome

30. The primary respondent cannot rely upon its defences. Therefore, the application is successful. In accordance with section 73(1) of the Act, the following order is made:

(a) Lloyds Warranty Limited shall change its name within one month of the date of this order to one that is not an offending name;^{[footnote 26]}

(b) Lloyds Warranty Limited and Mr Alanizy each shall:

(i) take such steps as are within their power to make, or facilitate the making, of that change;

(ii) not to cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name.

31. In accordance with s.73(3) of the Act, this order may be enforced in the same way as an order of the High Court or, in Scotland, the Court of Session.

32. In any event, if no such change is made within one month of the date of this order, I will determine a new company name as per section 73(4) of the Act and will give notice of that change under section 73(5) of the Act.

33. All respondents, including individual co-respondents, have a legal duty under Section 73(1)(b)(ii) of the Companies Act 2006 not to cause or permit any steps to be taken calculated to result in another company being registered with an offending name; this includes the current company. Non-compliance may result in an action being brought for contempt of court and may result in a custodial sentence.

Costs

34. The Tribunal awards costs from the published scale at paragraph 10 of the Tribunal’s Practice Direction. This is intended to provide a contribution to costs, but not to recompense the successful party. It is the applicant who has been successful in these proceedings and who is entitled to a contribution towards its costs. The award breakdown is as follows:

Filing the Form CNA1 and considering the Form CNA2: £400
Preparing and filing evidence and considering the other side’s evidence: £500
Fee for filing the Form CNA1: £400
Fee for filing the Form CNA3 x 2: £300

Total: £1600

35. Lloyds Warranty Limited and Nasser Alanizy, jointly and severally, are ordered to pay Lloyd’s, a body incorporated by the Lloyd’s Act 1871 the sum of £1600. This sum is to be paid within twenty-one days of the expiry of the period allowed for appeal or, if there is an appeal, within twenty-one days of the conclusion of the appeal proceedings (subject to any order of the appellant tribunal).

36. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to uphold the application; there is no right of appeal in relation to costs. Any notice of appeal must be given within one month of the date of this decision. Appeal is to the High Court in England Wales and Northern Ireland and to the Court of Session in Scotland. The Tribunal must be advised if an appeal is lodged.

Dated 28 September 2022

Mark Bryant
Company Names Adjudicator

1. Statement of case, para 11 ↩

2. Mr O’Connor’s witness statement, para 2.9 ↩

3. At Exhibit WOC3 ↩

4. Mr O’Connor’s witness statement, para 3 ↩

5. Ditto, 4.3 ↩

6. Ditto, para 4.1 ↩

7. Ditto ↩

8. Ditto ↩

9. Ditto ↩

10. Ditto, para 4.2 ↩

11. Ditto, para 4.3 ↩

12. Mr Alanizy’s witness statement, para 5. This statement appears to suggest that the primary respondent is possibly trading, however, it does not rely upon this as a defence under section 69(4)(b)(i) of the Act and I say no more about it. ↩

13. Ditto ↩

14. Ditto, para 6 ↩

15. Ditto ↩

16. Ditto, para 7 ↩

17. Defence, para 10 ↩

18. Ditto ↩

19. Mr O’Connor’s first witness statement, para 5.2 ↩

20. Mr Alanizy’s witness statement, para 18 and Exhibit G ↩

21. Ditto, para 8 ↩

22. [2005] UKPC 37 ↩

23. [2003] EWCA Civ 1446 ↩

24. Mr O’Connor’s first witness statement, para 3.1 and Exhibit WOC3 ↩

25. Mr O’Connor’s second witness statement, para 4.3 ↩

26. An “offending name” means a name that, by reason of its similarity to the name associated with the applicant in which he claims goodwill, would be likely to be the subject of a direction under section 67 (power of Secretary of State to direct change of name), or to give rise to a further application under section 69. ↩