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Case:
BGH NJW 1999, 279
Date:
13 October 1998
Note:
Translated German Cases and Materials Under the direction of Professors P. Schlechtriem, B. Markesinis and S. Lorenz
Translated by:
Mr Raymond Youngs, Southampton Institute
Copyright:
Professor B. S. Markesinis

Facts:

The claimant runs a car hire business in O and claims an injunction preventing the defendant - a large insurance company undertaking - from statements and actions damaging its business. The claimant alleged that the defendant's experts had in a number of cases told accident victims who had hired cars from the claimant that there had frequently been problems with the claimant's car hire charges and they had tried to persuade them to return vehicles and hire cheaper cars from a firm named by the defendant. The claimant sought an injunction to prevent such action in business contacts for competition purposes and an injunction in the same terms but without the reference to competition. The Landgericht ordered the defendant not (1) to tell the claimant's customers that there were frequent problems in relation to the claimant's car hire charges and not (2) to recommend accident victims who had already hired a vehicle from the claimant (referring to their duty to mitigate their loss) to return it and to hire another with the firm E or another firm in O.

On appeal by the defendant, the Oberlandesgericht rejected the whole of the claim. By its appeal in law the claimant had the judgment of the Landgericht reinstated.

Reasons:

I. The appeal court proceeded on the basis that the claimant had accepted the dismissal of its principal applications in competition law. It now only concerned itself with the claimant's claims based on tort law, which had been successful at first instance. It considered these claims not to be acceptable.

Insofar as the claimant objected to the statement that there were often problems with the invoicing of its car hire costs, only § 824 of the BGB needed to be considered as the basis of the claim; it was not possible in this respect to fall back on the framework definition of an interference with an established and functioning business. The prerequisites for a claim based on § 824 of the BGB were not however fulfilled, as here it was question of assertion of true facts by the defendant's experts. Problems with the claimant's invoicing had existed as a matter of fact. These resulted from the defendant, as a leading insurance undertaking, taking the view that the victim of an accident was in principle required, in view of the duty to mitigate loss, to hire a replacement vehicle at the cheapest available hire price on the market. As the defendant had been confirmed in this view by several court decisions in the O Landgericht area and the claimant was not one of the cheap suppliers, the invoicing problems were obvious. Whether the defendant's legal view was accurate, was not of importance; for the question of the alleged invoicing problems, it was only actual implementation mattered. However, not only was there no assertion put forward which was contrary to the truth in the sense of § 824 of the BGB; the defendant and the victims also had a justified interest in the sense of § 824 (2) of the BGB in the communication to which objection was made. It was virtually a requirement for the defendant to mention in good time that it was only ready to allow the hire car costs on the basis of the cheapest supplier and that accordingly there would be problems if cars were hired at higher prices.

The recommendation given to the victims to give back the hired car to the claimant and to hire a vehicle elsewhere was not open to objection on legal grounds either. No illegal interference with the claimant's established and functioning business was to be seen in this. There was no incitement to the victims to break their contracts with the claimant, for the simple reason that the hire contracts were terminable at any time. The proprietor of a business must as a rule accept inducements to cancel contracts without their being breached. Different considerations could only apply if special circumstances were found which amounted to dishonesty. Such a case was not however present here, as the advice given by the defendant's experts to the victims with regard to the invoicing problems with the claimant had been accurate and it had been in the interests of both sides that these problems had been mentioned in connection with the negotiations about the loss.

II. The judgment of the appeal court does not stand up to the arguments contained in the appeal in law. The claimant is entitled to the claims which have been made for an injunctive relief and which formed the basis of the judgment of the Landgericht.

1. Contrary to the view of the appeal in law, the appeal court was admittedly correct in not including the principles for the claim under competition law in its judgment. Possible claims by the claimant for injunctions under §§ 1 and 3 of the UWG (Unfair Competition Act) were, in view of the position here in procedural law, not the subject of dispute at the level of the first appeal.

No final decision is needed on the question of whether, under what conditions and in what manner a party can in principle, in cases in which claims arise under competition law on the one hand and tort law on the other, restrict the legal examination to the one or the other basis of claim. In any case, in the circumstances given here, the claimant has effectively limited the object of the dispute to be decided by the appeal court at second instance to the examination of claims to injunctive relief in tort law, to which it is entitled from the facts put forward which support the judgment at first instance.

2. The appeal in law correctly objects to the fact that the appeal court considered to be unfounded the claims for injunctive relief in relation to the statement that there had often been problems with the invoicing for the claimant's hire car prices in the context of the calculation of hire car costs in the accident replacement business (no.1a of the judgment of the Landgericht, concerning the claimant's first alternative application), and the recommendation to the victims, referring to their duty to mitigate loss, to give back the claimant's hired vehicle and to hire a vehicle of the same value from another firm instead (no.1b of the judgment of the Landgericht, concerning the claimant's second alternative application).

In both respects, the request for an injunction is justified from the point of view of an interference by the defendant with the claimant's established and functioning business.

a) The considerations which formed the basis of the appeal court's dismissal of the first alternative application under § 824 of the BGB meet with objections. The appeal court says that the statement that there were problems from time to time with the claimant in the context of calculating car hire costs in the business of accident replacement is about a true fact, since calculation of loss between the defendant and each victim did not actually take place in this respect without problems. Admittedly, this must be agreed. But contrary to the view of the appeal court, this was not the whole content of this statement, as the appeal in law correctly points out. The average victim (whose understanding is what matters here) would have understood this statement as meaning that the claimant was responsible for the invoicing problems which had occurred, because it charged hire car costs at a level not fully recoverable in compensation law. According to the findings made in the appeal judgment, however, the invoicing problems in reality arose because the defendant - inappropriately in law - holds the view that the accident victim was in principle required, from the viewpoint of the duty to mitigate loss, to hire a replacement vehicle at the cheapest hire price obtainable on the market and the victim could not therefore demand compensation for hire prices going beyond this. Such a invoicing practice does not however satisfy the actual legal position (references omitted). Contrary to what the victims would naturally infer from the statement objected to, it was thus primarily the defendant itself which was responsible, by its conduct in relation to the invoicing, for the problems which arose. It can however remain undecided whether one should proceed here on the basis that the defendant was making an incorrect assertion of facts in the sense of § 824 of the BGB or whether this cannot be so because value judgments, namely views of the defendant on the legal position, substantially shaped the statement to which objection is made.

b) This is because insofar as a claim under § 824 of the BGB is to be denied, the claimant can base its request for an injunction on § 823 (1) of the BGB in combination with § 1004 of the BGB because of the interference with an established and functioning business. It is possible to fall back on this basis of claim if the tort under § 824 of the BGB is not relevant (references omitted).

aa) The protection of businesses in tort is aimed at business related interferences which concern the business organism or entrepreneurial freedom of decision and go beyond mere nuisance or hindrances which are normal in society (references omitted). An interference of this kind is present here. If the defendant communicates with the claimant's car hire customers as accident victims in the context of its concept for calculating loss, and refers them, in the way it has done, to problems with invoicing for the claimant's car hire prices, this amounts to a deliberate interference with the claimant's business relationships with its customers. This is so even if the defendant's motivation for action of this kind is based on keeping its own insurance payments as low as possible. In view of the fact that the defendant is one of the leading insurance undertakings and accident replacement business is of considerable importance for car hire businesses like the claimant's, action of this kind by the defendant, must lead to a distinct uncertainty on the part of customers in their relationship with the claimant. It interferes with the claimant's protected commercial enterprise in a manner which has legal implications.

bb) This interference is also to be regarded as illegal. This follows from balancing the interests of the parties, taking into consideration their respective positions as protected not only in civil law but also in constitutional law and especially the basic right of the defendant under Art 5 of the Basic Law (references omitted).

The defendant can admittedly not in principle be forbidden to disseminate a legal view held by it, even if this view should be regarded as inaccurate measured by the standards of the case law of the court dealing with appeals in law. Nor is the defendant prevented, within the framework of its own business activity (which includes calculating loss cases under insurance law) from approaching the victims, in order to ensure with them that treatment and invoicing is as efficient as possible and corresponds to the legal duties of all participants. But even taking these principles into consideration, the action of the defendant objected to here should not be regarded as lawful.

The defendant's experts had represented that in the area of calculating car hire costs in the accident replacement business there were problems from time to time in the invoicing of the claimants' car hire prices. The defendant thereby gives to the victims as car hire customers of the claimant the impression that by hiring a vehicle from the claimant they had incurred the risk of having to bear part of their costs themselves. The business relationship with the claimant is thus represented to these customers as an economic risk. But according to the findings which have been made, this action by the experts is based, as already mentioned, on the defendant's view that in principle it must as a vehicle liability insurer only reimburse the car hire costs which arose by hiring a replacement vehicle at the cheapest hiring price available on the market. As this view of the law does not correspond with the legal position and the problems which have occurred on this basis with the invoicing of the vehicles hired by the victims from the claimant are the responsibility of the defendant itself, the statement by the defendant's experts to the victims which is the subject of objection lacks a satisfactory basis.

The defendant has no justified interest in deliberately, on the basis of an inaccurate view of the law (the incorrectness of which, however, remains concealed from the victims), inducing uncertainty in the victims - using the authority of a large insurance undertaking responsible for adjusting the loss of those affected - in their business relationships as car hire customers of the claimant, as has happened here, and thus seriously endangering these relationships to the disadvantage of the claimant's commercial enterprise. By the defendant's action, the victims, who are not as a rule familiar with the law and will be frequently inclined to avoid differences with the defendant in order to ensure speedy loss adjustment, see themselves exposed to pressure not justified by the real legal situation, which affects their behaviour as car hire customers of the claimant, as the defendant intends it should.

In this situation it is not possible to set against the claimant's protected interest in the integrity of its commercial enterprise an interest of the defendant of equal value in the statement by their experts to the claimant's car hire customers who were accident victims, which is the subject of objection here. The interference in the commercial enterprise, for which the defendant cannot in these circumstances rely on its basic right of freedom of expression of opinion, is to be regarded as unlawful.

cc) No different conclusion can be drawn from the fact that various courts in the Landgericht district of O share (or at least, at the point in time of the statements objected to, shared) the legal view of the claimant (this appears to be a mistake and should probably read defendant) as described, on the duty to mitigate the loss of accident victims on the hiring of a replacement vehicle. Contrary to the view of the appeal court, the issue of the alleged invoicing problems is by no means only a question of factual implementation and the local practice of the courts. It is the real legal situation which is decisive. Only implementation which corresponds with this should be regarded as lawful; only references to invoicing problems arising on lawful loss adjustment would be in the justified interest of a party. On the other hand, the legal order cannot recognise any justified interest on the part of someone involved in legal transactions in orientating himself to a practice which is incorrect in law, even if this is supported - temporarily - by locally competent courts.

dd) The argument that the defendant could not in law be accused of fault in respect of the conduct to be assessed here, because he could refer to a corresponding local court practice at that time and the Senate decision [reference omitted] was not then available, is not of importance in this case. For the claim to injunctive relief (which is the only claim made here), the fault of the defendant is not the issue. The illegality of the interference is the only decisive factor. In this connection danger of repetition in the future must be assumed; from the findings which have been made and the parties' submissions referred to, no sufficient grounds are evident for proceeding on the basis that the danger of repetition has been dispelled.

3. The claimant's request for injunctive relief to prevent the defendant recommending the claimant's car hire customers to give back the claimant's hired vehicles and to hire vehicles of equal value with another (cheaper) firm instead, in view of their duty to mitigate their loss, was dismissed by the appeal court. The appeal in law succesfully challenges this. In this respect also, the claimant's claim to injunctive relief is justified from the point of view of the interference with their established and functioning business.

a) It can remain undecided whether the hire contracts concluded by the victims with the claimant are terminable at any time, which is the view of the appeal court, or whether, as the appeal in law points out, this can be otherwise, at least when the victim has hired a car for the length of his vehicle's repair. This is because the question of whether the defendant is to blame for encouraging the victims to break their contracts, which could be the case for hire contracts which were not appropriately terminable, does not matter in the present case.

b) The recommendation which, according to the findings made in the appeal judgment, was given by the defendant to the victims represents a business related interference in the claimant's commercial enterprise under the circumstances present here. It is true that a commercial enterprise as such is not in any way generally protected in tort law against inroads into its circle of customers. But here it is a question of a deliberate action by the defendant as a leading insurance undertaking which must inevitably - if the defendant wants to achieve its goal that victims only hire a vehicle with the cheapest supplier - lead to a substantial interference with the claimant in its accident car replacement business. The defendant's action is directed towards making victims decide to behave to the claimant's disadvantage, within the framework of the already existing of business relationships with the claimant, by using its position as liability insurer in relation to loss adjustment.

c) This interference by the defendant with the claimant's commercial enterprise must be regarded as unlawful. On the balancing of the justified interests of the participants which is required here, the principle must be borne in mind that, within the framework of an order based on a market economy, an interference in the contractual relationships of others is only to be considered as impermissible if special circumstances forming the basis of unfairness are established (references omitted). Contrary to the view of the appeal court, such circumstances forming the basis of unlawfulness are present here.

aa) The defendant's action which is to be assessed here rests - as must be deduced from the findings which have been made - on the incorrect legal view that the accident victim was required in principle, in view of the duty to mitigate loss, to hire a replacement vehicle at the cheapest obtainable hire price on the market; and could ask for no compensation for hire prices going beyond this. The defendant cannot be allowed any justified interest in implementing a legal opinion of this kind, which contradicts the real legal position, by means of recommendations to the victims and - as already discussed - in particular not even if and in so far as their legal opinion has found recognition in local court practice. An accident victim who has hired a replacement vehicle, within the framework of the so-called accident compensation rates, in such a way that there are no effective legal objections to the full compensatibility of his costs according to the principles of the judgment of the Senate (reference omitted) is not required by the duty to mitigate loss to change to another car hire firm if he subsequently hears of a cheaper offer. The defendant's action is therefore also not lawful from the point of view that it seeks retrospectively to put the victims as it were "in bad faith" by naming the cheapest supplier of hire vehicles.

bb) The recommendation made to the victims, who as a rule cannot recognise the incorrect approach in the defendant's opinion, gives them the inaccurate impression that they are under a duty to hire their replacement vehicle with the cheapest supplier named to them by the defendant and that they had committed a mistake by hiring from the claimant; and that this must now be corrected to avoid them suffering economic disadvantages, namely having to bear the hire car costs themselves in so far as they are higher than the cheapest supplier's prices. The victims are bound to fear difficulties based on an invoicing practice not in harmony with the real legal position. They are thereby put under pressure to behave in accordance with the defendant's recommendation to the claimant's detriment. This action is unlawful and in particular in the relationship to the claimant with regard to its commercial enterprise protected in tort law. The claimant does not need to accept such action, if the business relationships which it has entered into with its hire car customers are endangered by pressure being exerted on its contractual partners in a way which does not correspond to the legal position.

d) Fault on the part of the defendant does not matter as here also it is only a question of a request for injunctive relief. The danger of repetition is in this respect to be assumed, as contrary findings have not been made and furthermore the defendant considers its action to be permissible.

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