Tesco Supermarkets Ltd v Nattrass
Encyclopedia
Tesco Supermarkets v. Nattrass [1972] AC 153 is a leading decision of the House of Lords
on the "directing mind" theory of corporate liability
.
This is a leading case on the Trade Descriptions Act 1968
(s.24(1)), where Tesco relied upon the defence of the ‘act or omission of another person’ i.e. their store manager, to show that they had taken all reasonable precautions and all due diligence.
was offering a discount on washing powder which was advertised on posters displayed in stores. Once they ran out of the lower priced product the stores began to replace it with the regularly priced stock. The manager failed to take the signs down and a customer was charged at the higher price. Tesco was charged under the Trade Descriptions Act 1968
for falsely advertising the price of washing powder. In its defence Tesco argued that the company had taken all reasonable precautions and all due diligence, and that the conduct of the manager could not attach liability to the corporation.
Lord Reid held that, in order for liability to attach to the actions of a person, it must be the case that "The person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company."
In the House of Lords Tesco were successful with their defence showing that,
The store manager was not the directing mind and will of the company - the company had done all it could to avoid committing an offence and the offence was the fault of another person (an employee). The company was acquitted.
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
on the "directing mind" theory of corporate liability
Corporate liability
In criminal law, corporate liability determines the extent to which a corporation as a legal person can be liable for the acts and omissions of the natural persons it employs...
.
This is a leading case on the Trade Descriptions Act 1968
Trade Descriptions Act 1968
The Trade Descriptions 1968 is an Act of the Parliament of the United Kingdom which prevents manufacturers, retailers or service industry providers from misleading consumers as to what they are spending their money on....
(s.24(1)), where Tesco relied upon the defence of the ‘act or omission of another person’ i.e. their store manager, to show that they had taken all reasonable precautions and all due diligence.
Facts
TescoTesco
Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
was offering a discount on washing powder which was advertised on posters displayed in stores. Once they ran out of the lower priced product the stores began to replace it with the regularly priced stock. The manager failed to take the signs down and a customer was charged at the higher price. Tesco was charged under the Trade Descriptions Act 1968
Trade Descriptions Act 1968
The Trade Descriptions 1968 is an Act of the Parliament of the United Kingdom which prevents manufacturers, retailers or service industry providers from misleading consumers as to what they are spending their money on....
for falsely advertising the price of washing powder. In its defence Tesco argued that the company had taken all reasonable precautions and all due diligence, and that the conduct of the manager could not attach liability to the corporation.
Judgment
The House of Lords accepted the defence and found that the manager was not a part of the "directing mind" of the corporation and therefore his conduct was not attributable to the corporation. The corporation had done all it could to enforce the rules regarding advertising.Lord Reid held that, in order for liability to attach to the actions of a person, it must be the case that "The person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company."
In the House of Lords Tesco were successful with their defence showing that,
- a store manager was classed as ‘another person’, and,
- a system of delegating responsibility to that person was performance of due diligence, not avoidance of it
The store manager was not the directing mind and will of the company - the company had done all it could to avoid committing an offence and the offence was the fault of another person (an employee). The company was acquitted.
External links
See also
- TescopolyTescopolyTescopoly is a campaign run by United Kingdom anti-poverty and environmental campaign groups, aimed at highlighting environmental and social impacts attributed to British supermarket chains...
- Ward v Tesco Stores LtdWard v Tesco Stores LtdWard v Tesco Stores Ltd [1976] 1 WLR 810, is an English tort law case concerning the doctrine of res ipsa loquitur . It deals with the law of negligence and it set an important precedent in so called "trip and slip" cases which are a common occurrence...
- TescoTescoTesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
- The UK's Competition CommissionCompetition CommissionThe Competition Commission is a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom...
- Criticism of TescoCriticism of TescoThis article concerns criticism of Tesco, a supermarket chain in the United Kingdom. Criticism has been directed at Tesco from various groups, both national organisations and individuals. One of the biggest criticisms it faces is the perceived threat it poses to small businesses due to the monopoly...