Companies sharing a name and function

[David H]

Under British law it's illegal to have two firms with even similar names (unless personal names) offering the same services, for obvious reasons.

So we now have Diamond accident group

http://www.dag.uk.com/home.htm

and Diamond car insurance http://www.diamond.co.uk/

One only offers car insurance, the other sues the responsible party as well but also offers insurance cover. The only legal explanation would be if they had a contract not to sue, which is either the case or (like the previous Barclays/Budgens dispute over the letter B) one will have to go sharpish. Does anyone know the background of this conflict of interests?

[kempie]

There is no statute in British Law prohibiting two companies having similar names, even those offering the same services. The situation you describe is only actionable under Common Law.

Once a name has been registered it cannot be used by another company. Certain things are ignored when determining whether one name is the same as another, these include: "Limited" and "PLC" (or public limited company) at the end of the name. The words "Company" and "and Company". "The" at the beginning of the name. The use of capital or lower case letters and punctuation (and note that "and" is the same as "&" for these purposes).

So, if ABC Makers PLC is already registered, none of the following names would be available: ABC Makers Limited; The ABC Makers Company Limited; ABC-makers public limited company, etc.

If a name is only very slightly different from one already registered, it will be accepted for registration but there could still be potentially serious problems if the name is too like one already in use.

An established business (which could be a sole trader, a partnership, a UK company or a foreign company conducting business here) possessing a very similar name may be able to sue for the tort of passing off. This is a common law action with no statutory basis.

[kempie]

[Continued...]

As an alternative to bringing an action for passing off, if the established business is a UK registered company, it may be able to persuade Companies House to exercise its powers to order the new company to change its name. Such an order can be made under Companies Act 1985, sec.28 (2) if the new company has been registered in a name which is 'too like' one which was already on the register. If available, this is a much cheaper and less risky alternative to suing for passing off.

[David H]

That's more or less what I meant. But I reckon as the ads are on the same days in similar places half the public will be confused and call one for insurance when they meant the other.

I could contact the companies but it's more likely to get a definitve answer here than get anything directly. But some years ago Budgens changed the names of their small shops bought from 7-11 to B2. Barclays Bank had a totally unrelated business called B2 for investment and within the year the shops had to change their names back to Budgen despite having no similar purposes. But these two companies are offering the same things. Kenwood kitchen appliances automatically banned Kenwood electrical appliances from using the name here until they came to an agreement, the foreign firm used Trio until then. Better still Radio Shack who were a massive American company were banned from using the name here by a single identical shop also selling radio equipment in West Hampstead. Because of that they chose the name Tandy, though worldwide were known by Radio Shack.

On the basis of these cases I would have expected either or both of these companies to have kicked up a major scene as the potential for customer overlap is enormous.

[kempie]

Perhaps Diamond Car Insurance (part of Admiral Group) does not have much of a case for bringing about a tort since it using a name similar to other businesses established and registered before its formation;

e.g. Diamond Insurance Services Limited of Leek,Staffs. has been trading under that name for over nine years.